Archived Articles

Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

Global Real Estate Project
News Index

Directories
  Int'l Realty
  US Realty

Let me begin with a joke that I learned during the dark communist ages. Then the people from the wrong (eastern) side of the Iron curtain said Hungary was the happiest barracks in the socialist camp. Indeed its communist rulers started market-oriented reforms at the beginning of the 70s long before the world knew anything about Mr. Mikhail Gorbachev. The deep contrast between Hungary and the other communist countries in the Eastern Europe was so obvious in the 80s that the former Soviet union government deterred its citizens from visiting this ally. Even the transition to the multi-party democracy wasn't so sharp in Budapest as in the other former communist countries. Realistically, in Hungary there wasn't a democratic revolution at all; elections were called just as in any western country, the communist party lost and the right-wing parties took political power. There wasn't bloody unrest as in Romania; street demonstrations as in Poland; or communist-reformers plots as in Bulgaria. There wasn't a country division like Czechoslovakia's or wars like Yugoslavia. One nice day ordinary Hungarians woke up and learned that they lived in a democratic state.

Unlike other former communist states Hungary didn't experience a market shock after the fall of communism. In 1989 half of Hungarian export went to the Western Europe and only one third of it was connected in any way with the former socialist states. Foreign investors weren't afraid of the political change in the country because the basic economic laws were introduced long before 1989. The political class shared the main internal and foreign priorities - integration to the West politically, economically and militarily. All this was essential in making Hungary the leader in Eastern Europe by attracting direct foreign investments. The financial windfall in the country of 10 million made it possible for Hungary to be rated as equal in the international financial markets with countries such as Greece and Korea (Sovereign ratings of the Fitch IBCA Agency, 8 May 2000).

The real estate market in Hungary, in general, and in the capital city of Budapest, in particular, has been moving dynamically since the political change of 1989. Immediately after it, existing housing prices rose due to the lack of supply in certain segments of the market, especially for office space. As in many other former communist countries hundreds of thousands of newly created firms rented residential space in the downtowns for business purposes that temporarily pushed up rents and real estate prices. In the mid-90s luxury office spaces appeared on the market in large quantity which, coupled with the natural elimination of some small firms, explained the decrease in prices and rents throughout the decade by more than 50 percent.

The development of the car culture washed out the border between the capital and the rest of the country. Unlike many other Eastern European states, Hungary is relatively homogeneous in its geography - more than 84 percent of its territory is situated below 600 feet above sea level. Every corner of the country can be reached by car from Budapest within 1 ½ - 2 hours. Its surface - 35,000 sq.miles is not big enough even to fill the triangle that occurs if we link the Texas cities of San Antonio, Houston and Dallas. This partly explains why the prices and rents in the country as a whole (with exception of the most luxurious and tourist attractive areas of Budapest) are relatively similar per sq. meter.

Prices for residential properties in Budapest vary between $500 and $3000 US/sq.meter (1 sq.meter=10 sq. feet). More than $1500 US/sq.meter is paid mostly by local firms which are still looking for condominiums or houses that they turn into offices, or by local people who buy properties to rent later to western expatriates. In the bigger towns residential property prices vary between $200 and $1000 US/sq.meter. In the small towns prices could occasionally break the $200 per sq.meter barrier.

Residential houses and flats in Hungarian towns may be rented monthly between $3 and $30 US/sq.meter. Rents above $10 US/sq.meter most probably hide commercial structures which rent residential properties for business goals. Offices and space for commercial purposes were in high demand in the beginning of the 90s as more and more multinational companies arrived in the country, driving up rents to $40 US per sq.meter or even higher. With the new office and retail construction (in Budapest alone it accounts for more than 400,000 sq.meters of offices and more than 300,000 sq.meters of retail space in the 90s) rents and prices went down reaching more realistic levels.

Hungary is one of the Eastern European countries with the most liberal legislature when it comes to the rights of the foreign nationals to buy or rent real estate. With a special permit they can acquire any type of real estate except arable land and land in protected areas. Foreign companies can own buildings for their activities through their Hungarian subsidiaries.

--------------------

See also the directory of companies providing real estate services in, and general real estate information of Hungary.