Investing in Hungary

Invest in Hungary?

Some years ago, when I did it, I would say okay. Plenty of options.

But today?  Nope. In one word: Don't.

Especially for the small to medium sized investor. That boat as sailed. All in the hands of oligarchs now.

Of course, if you are investing from the UAE sovereign wealth fund... that is different... 

A real dilemma.
Should I stay  or should I go ?
Seriously it all depends on one's age, income and "tolerance" levels.
In 1989 a old friend told my husband to invest in property in Hu.
We thought WTH? What if they decide to go all red again?
Missed that boat!
Timing is everything.

Hi Marylin,

As far as I think, it is still a good idea to invest in property in Hungary, as it can be a source of extra income if you can let it out. There are a lot of tourists visiting Hungary, as Hungary is considered to be a cheap destination.

melindamondo wrote:

Hi Marylin,

As far as I think, it is still a good idea to invest in property in Hungary, as it can be a source of extra income if you can let it out. There are a lot of tourists visiting Hungary, as Hungary is considered to be a cheap destination.

Perhaps if you are young enough to wait it out.
We invested in a flat around 12 years ago. Was flat lined forever .
Now it is OK but if we think over the exchange of purchasing at 200 forints per US dollar vs 300 or so now, we still are not ,"winners" if we sold right now.
Bought a home in S. Ca. in 1986 and made a ton of money in the 9 years we owned it, this is basically chump change here in Hungary.
If we waited it out another decade we may hit pay dirt or be in the dirt, pushing up daisies.

Marilyn Tassy wrote:

melindamondo wrote:

Hi Marylin,

As far as I think, it is still a good idea to invest in property in Hungary, as it can be a source of extra income if you can let it out. There are a lot of tourists visiting Hungary, as Hungary is considered to be a cheap destination.

Perhaps if you are young enough to wait it out.
We invested in a flat around 12 years ago. Was flat lined forever .
Now it is OK but if we think over the exchange of purchasing at 200 forints per US dollar vs 300 or so now, we still are not ,"winners" if we sold right now.
Bought a home in S. Ca. in 1986 and made a ton of money in the 9 years we owned it, this is basically chump change here in Hungary.
If we waited it out another decade we may hit pay dirt or be in the dirt, pushing up daisies.

Marilyn, you're so right.  There's no spectacular capital growth in Hungary for property.   If you build property then there's a possibility but it could take 3 or more years to sell.  Been an uptick fairly recently but nothing like the growth in other countries.    In the countryside, forget it.   But on the other hand, owning is  probably cheaper over the long term than renting.  So you're more certain to break even overall even with the lost opportunity cost. It's a safe investment.  Interest rates have been pathetic recently  so better off working the stock exchange if not risk adverse.

fluffy2560 wrote:

There's no spectacular capital growth in Hungary for property..... In the countryside, forget it.

In most country side places... true.

Not true where I am (Balaton). Prices have gone up 400% or more in just a few years.

melindamondo wrote:

There are a lot of tourists visiting Hungary, as Hungary is considered to be a cheap destination.

The problem with a destination being considered cheap, is one gets cheap tourists. There are places on Airbnb going for 5,000 HUF a night. I can spend more eating out at lunch. That is not really extra income. Especially if one does not have 100% occupancy rate. One has to have more to offer to charge more to more than cheap tourists. And more to offer means more investment. Etc. Snowball effect. Better to get a long term rental tenant. That would be more likely an income.

klsallee wrote:

fluffy2560 wrote:

There's no spectacular capital growth in Hungary for property..... In the countryside, forget it.

In most country side places... true.

Not true where I am (Balaton). Prices have gone up 400% or more in just a few years.

It's all location location location.

But of course, if one is trying to be a property speculator, there's the capital gains tax which would knock any profitability down quite a bit.

But one of the things about land is they aren't making any more of it so quite a good investment really over the longer term.

My house has gone up in value even taking into account inflation etc.  However, we found the insurance company has put a limit on its value for rebuilding. It's something less than it's actual market value estimate as far as we can tell.  We think it's lower by judging prices on like-for-like houses for comparison.

The forint seems to be losing it's value ATM.
Great time to buy but not to sell.
Location is the key for any property investment.
Dang , I saw a home in Sherman Oaks Ca. when we were looking to buy a home in Ca. years ago.
It was only about $30,000 more then the house we bought.
Our house cost a bit more then we had planned on at first but location was great.
My mom's former Ca. home cost only $17,500, worth at least $800,000 now days,just crazy as it was just a tract home outside of LA county.My parents almost bought a home instead located in Burbank for about $10,000 more then they home they purchased. That home was owned by one of the former Mickey Mouse Kids from the 50's and had a huge built in swimming pool. Wish they had thought large and not tried to go all budget.
Our old friend in Budapest has his parents flat. It is located in the 5th in a nice quiet area facing the quiet street, 2 huge balconies and about a good 110sq. meters in size. Didn't cost them really a penny in 1956 to buy, just his father's life is all. ( Was hung by his neck over the flat!)
My husband grew up in a smaller flat in the 5th close to this friends place.Faced the yard too. His mom sold her rights to lease it before the change here for only $800.! Wish we had known she was going to do that as we would of given her $800. to hang onto it. Back then the gov. owned all the flats but people had a right to buy where they lived when the change happened.
Think property in the 5th is at least one million forints per sq,  meter ATM.
Most people want a quick turn around on their investments, think those days of buying cheap and selling high are about over with. We doubled our money on our S. Cal. home after just 9 years, good luck with that these days.Not going to happen.
Best to buy something you love and plan on living in for years to come so either way you are happy with your purchase and living life day by day.
I am not sure why these lamo adds are popping up in my post, don't like them at all.

Marilyn Tassy wrote:

....
Most people want a quick turn around on their investments, think those days of buying cheap and selling high are about over with. We doubled our money on our S. Cal. home after just 9 years, good luck with that these days.Not going to happen.
Best to buy something you love and plan on living in for years to come so either way you are happy with your purchase and living life day by day.
I am not sure why these lamo adds are popping up in my post, don't like them at all.

There's a local theme going on where HU people working abroad come back with money and buy property in their kids name.   It's still possible to buy apartments in Budapest at a lower cost but you get what you pay for.  Usually single rooms with a "platform" sleeping area.  Sort of student living spaces or even Airbnb.  I think there's a bit of a surplus on Airbnb but the rents are higher.  Not sure if the local government is trying to regulate it.

If the HUs working abroad are really loaded, they are also buying down in Balaton but I hear from the relatives, they are usually on the North side.  I suppose it's cheaper as no highway.

We thought about looking into a "country style" home to be closer to the water and have a small garden.
The thing is we are honestly past working around a home at our ages.
I talk a big talk but to actually get down and dirty planting, digging and repairing around a house is not for us any longer.
Was thinking of buying another flat instead but no, too many "party animals" living in these resort areas for us and we are not going into some old folks home either.
My husband is thinking more of just taking a couple of bags with us and going to Hawaii.
Could happen but who knows?
We never like to get tied down anywhere and owning property is more like you are owned then of being an owner of something.
Yes, we still have the ,"Hippie" mind set of wanting to feel free but then again when one is free they usually wish to be settled.
To be honest, we never had any issues with renting a nice place with good management who took care of the repairs and kept the property cleaned up.Even when we leased a house in Hilo the owner came once a week to mow the grass and he never bothered us as long as he got his rent money, which he always did.
Lived once when I was "underaged" in a senior citizen building in Vegas.
It was close to my casino job and quiet enough for me to sleep during the day.
Was actually a great place to live, friendly neighbors who watched out for each other, no issues.
Husband was thinking of renting out our flat but I have no desire to be a slum lord, would rather just move on then worry about material things.
Of course if one has family near by it is a different story all together.
If my son lived in Hungary we would of already moved on to some quiet country home with him.
We have 2 B&B in our building, not sure how that got past the vote but in the past only a handful of flat owners would show up for the yearly meeting for the house.
One was owned by the 60 year old widow across and up stairs from us, a nice larger unit on the corner of the house.
After she killed herself  her sons fixed it up and it turned into a B&B for a summer or two.
This past year however... something odd is going on up there.
Same small group of younger women hanging outside wearing bath robes and smoking cigs . Looks like it may of turned into a house of ill repute!!
For sure by just looking at this local women, about 3 or 4 same faces, they defo can't afford the rent on a large B&B and still have time to hang out smoking in bathrobes....
I could be wrong but , really don't think so
We lived in a nice condo in Las Vegas years back, had 2tennis courts, 3 large swimming pools and in house management.
Never had any issues with repairs, noise control was good and everything was neat and tidy, nice building from the outside.
My son told me that several of the units were being used by young college women as the source of their income.... Nothing new under the sun.

Marilyn Tassy wrote:

....
After she killed herself  her sons fixed it up and it turned into a B&B for a summer or two.
This past year however... something odd is going on up there.
Same small group of younger women hanging outside wearing bath robes and smoking cigs . Looks like it may of turned into a house of ill repute!!
For sure by just looking at this local women, about 3 or 4 same faces, they defo can't afford the rent on a large B&B and still have time to hang out smoking in bathrobes....
I could be wrong but , really don't think so
......
My son told me that several of the units were being used by young college women as the source of their income.... Nothing new under the sun.

I hope she didn't kill herself in the place.  Puts a different complexion on it.  It might sound morbid but the previous owner of our house died in it - was found  in bed in one of the rooms downstairs.  I think it's a bit creepy but no-one else seems to be bothered or care.  We didn't tell the kids. But sometimes I think strange things happen.  We usually say Kovacs did it if something odd happens. 

Mrs Fluffy says it's usual for people to die at home if they are old.  So it's just normal or was back then that they get laid out in the house.  Seems a bit undignified.  But they certainly bury them quickly.  It's a bit more clinical in the UK.

I suspect your bathrobed neighbours are engaged in what you think they are.

The Dutch and Germans have the right idea for those kinds of knocking shops.  They put them out of town in the middle of nowhere or on industrial sites.   No-one lives out there so they can make as much noise and car doors banging any time of the night.   Actually not a bad thing as it's dual use and it means people are hanging around not necessarily doing crime as the cops often are present. 

In Amsterdam, in the area around the main station, there's a bit of a kind of parallel universe - during the day it's just like anywhere else but when the kids are tucked up in bed there, it all changes, the red lights come on, the cops arrive and hang around patrolling and the tourists descend in droves.  Bit of voyeurism rather than real action and quite discreet.   

It's all rather civilised although probably there's a criminal element I never saw when I lived near Amsterdam.  I suppose mainly the people of the night are on the game for drug money.  That's no good.

fluffy2560 wrote:

If the HUs working abroad are really loaded, they are also buying down in Balaton but I hear from the relatives, they are usually on the North side.  I suppose it's cheaper as no highway.

Cheaper? You think? Have you checked. I have. More expensive where I am then diametrically apposed across the lake.
The north is, for now, simply appears to be the more in vogue place to buy. Being in vogue defines fiscal reality. There are more BMV and Mercedies here in the last two years than ever before. In our tiny 300 person village. Which is actually, kind of a dump. The village could not even pick up garbage for over a month, till it was finally mentioned on online and shamed them.... Says a lot.
So I doubt it is expats sending money home. These people have made their money in Hungary. It is a wine region. It is trendy. The hills have a great view (bragging rights). Etc. I suspect. It is more home grown. More second class Nouveau riche second wave Fidesz tiny wealthy that could not buy right by the lake. Those properties were sold years ago. And no, those buying here don't live here. They are "holiday homes". Or worse, AirBnB investments. Again. Simply bragging rights.

I short... it is complicated.

klsallee wrote:

fluffy2560 wrote:

If the HUs working abroad are really loaded, they are also buying down in Balaton but I hear from the relatives, they are usually on the North side.  I suppose it's cheaper as no highway.

Cheaper? You think? Have you checked. I have. More expensive where I am then diametrically apposed across the lake.
The north is, for now, simply appears to be the more in vogue place to buy. Being in vogue defines fiscal reality. There are more BMV and Mercedies here in the last two years than ever before. In our tiny 300 person village. Which is actually, kind of a dump. The village could not even pick up garbage for over a month, till it was finally mentioned on online and shamed them.... Says a lot.
So I doubt it is expats sending money home. These people have made their money in Hungary. It is a wine region. It is trendy. The hills have a great view (bragging rights). Etc. I suspect. It is more home grown. More second class Nouveau riche second wave Fidesz tiny wealthy that could not buy right by the lake. Those properties were sold years ago. And no, those buying here don't live here. They are "holiday homes". Or worse, AirBnB investments. Again. Simply bragging rights.

I short... it is complicated.

Oh, well, could be, yes, been a while since I looked last.  Anything past about Balatonfüred or Tihany  and my mind goes a bit blank. Maybe as far down as Rev-fulop sometimes.  I do biking loops on the ferries back to Tihany usually.  I have been all the way around but we don't really go farther as our holiday hang out is on the other (Southern) side from Tihany. 

We did look into the North but more rocky, steeper drop off etc so fizzled out on that idea.  But we do know relatives with money from expat work buying on the North.   

Mrs Fluffy and I have been looking for years for land by the lake (circa 300-400m'ish from the beach) on the Southern side but we've seen nothing really.   We're think about getting the land and putting a shipping containerised holiday home on it.  Another contact has actually gone as far as designing his container home but has no land either.   As usual, it's the utilities, the crappy old buildings that have to be demolished. All adds to the cost.

We've seen even in my own village a few of these Nouveau Riche palaces fall into disrepair.  Some of them might even have been illegally built or built to such a silly ostentatious design, they don't equate to anything remotely modern. It is (or was) flashy or posh to them way back then, but now it looks the height of bad taste kitsch with faux French furniture, Roman columns and stone cladding.  We saw one place which was full of Roman marble type stuff.  They thought  it was a major selling point but it was hard for me to keep a straight face.  I told the real estate agent that it'd cost quite a lot to rip it all out.  She seemed genuinely surprised people wouldn't like it.  It's a bit like swimming pools, a lot of people would do better to fill them in.

Fidesz followers seem to have slightly better taste and far less bling but yes, they still like their BMW/Mercs and 4WD town tractors.   But their housing is less in your face and more like individualised housing estates with houses in a row.

There has been at  least 2 suicides in our house since we lived here.
One was a doctor who lived on the top floor, pill related death.
This women with the corner flat did both pills and booze.
Both died at home alone in the flats...
I don't feel any "ghostly" energy around here, thankfully, I have also cleaned house just a few demonic items left that my husband will not allow me to toss out such as his Buddhist stuff.... Also have a nice wall hanging my Thai cousin in law gave us from Thailand.
I try not to put energy into objects but I know some people do such  with a cross or lucky rabbit's foot etc. Silly stuff.
Totally of topic.
OK, so people should know a bit of the history of a property before investing.
If one does tune in they may be able to feel an energy from a building or place.
I know in New Mexico although it was remote and out there, the land had a smell and feel of positive energy about it.
To me Hungary is very pretty but there is something in the air that doesn't always sit right with me, can't put my finger on it, perhaps too many wars and spilled blood on the ground over the centuries? I try not to tune into my "Hippie" senses much as they always get me into trouble.

Marilyn Tassy wrote:

....
To me Hungary is very pretty but there is something in the air that doesn't always sit right with me, can't put my finger on it, perhaps too many wars and spilled blood on the ground over the centuries? I try not to tune into my "Hippie" senses much as they always get me into trouble.

Despite not believing in that sort of thing, I do sometimes get creepy feelings in my own house.   

Last time it was the dog creeping past the door and the time before it was 8 year old No. 4 Fluffyette sneaking past wrapped up in a white blanket at about 2am!   I ask you!  Talk about bad timing!  We do find things moved around.  But I think we must have moved them and forgotten or the kids did it.

One thing I do know I don't want and that's to be caught by the ghoulies.

I sometimes people walking around with their noses stuck in a cell phone have already become ghoulies!

Marilyn Tassy wrote:

I sometimes people walking around with their noses stuck in a cell phone have already become ghoulies!

Those are smartphone zombies!

Few days back we took a nice walk on the Pest side of the river.
Noticed a flat for sale which faced the river, 64 sq. meters on the first floor.
Darn now that would be nice to be able to look out and see the river.
12 years back we were about to look at one of those buildings facing the Danube... Location was great, was a steal by today's standards.
Not sure if my memory is correct but think it was around 14 or 16 million forints in 2006.2007.
Can't remember why we didn't check the flat out.
When we saw this flat up for sale this weekend, we discussed how we should of invested right after we sold our Ca. home, could of bought perhaps a few flats with our capital gains and been sitting pretty.
Timing is everything as well think that ship has sailed and will not return.
Actually back in 1990 when we sold our Ca. home I had Hungary as a never again place in my mind and had other stronger ties to the US.
At that time I hardly saw myself even visiting Hungary again let alone picking up and moving here.