Why invest in Budapest (Hungary)?
Budapest is one of the great capital cities
of Europe, the “Pearl of the Danube”.
It is a quality city, which ranks well with
cities like Paris or Vienna, and is located
at the heart of the new enlarged Europe.
Budapest is very well located within Central
Europe, and an excellent infrastructure means
that it is very accessible from the rest of
the continent. For instance, Vienna is a mere
three-hour train ride away, and Bratislava,
the Slovakian capital, is just two and a half
hours away by train. Direct rail connections
link Budapest to most of Europe, including Berlin,
Trieste, etc.
Budapest has a superb infrastructure within
the city, with a fully integrated public transport
network, reputed to be the best in Europe. Other
infrastructure, such as roads and fibre optic
communication networks, is modern and well planned.
Property prices in Budapest, while rising, remain
low by the standards that apply in the rest
of Europe. While direct comparisons are difficult,
prices in city centre Budapest are about half
of those paid in other major capitals, including
Dublin. Good quality two-bedroom apartments
can still be found in Budapest at about eighty
thousand Euros. The quality and value available
in Budapest seem unbelievable to those of us
more used to Irish prices, but this will not
last, and prices seem destined to rise substantially
over the next few years.
As an investment opportunity, our company and
the markets predict excellent capital growth
in this developing area. With capital appreciation
predicted to be 15% for 2006, 2005 showed capital
appreciation growth of 13.7% while 2004 increased
to 12.7%. This level of appreciation is expected
to continue for some time due to the fact that
many of existing properties in Budapest are
in need of renovation meaning there is big demand
for newly built apartments in prime locations.
Secondly, Budapest has attracted more regional
company headquarters than any other Eastern
European capital city, due to its central location
in Europe. Companies such as GE Exxon-Mobil
and Nokia have all set up international operations
in Hungary.
Hungary’s accession to full membership
of the EU in 2004, with probable transition
to the Euro in 2008, is expected to impact strongly
on property prices. A potential for significant
capital gains would seem to exist.
Hungary enjoys stable western style government,
as well as a well-educated population and superb
infrastructure. The road and transport networks
are far beyond anything, which we are likely
to see in Ireland for many years to come, even
after thirty years of EU membership. Hungary
would seem to be entering the EU from a position
of strength.
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