Budapest

It was foreigners who were looking for properties in the traditional business quarter, since, following examples in their home countries, they expected the highest price rises there. The area near Parliament and the banks, around Andrássy Avenue and Váci Street became in demand and investors also reacted to the trend. Property buyers fell into categories defined by not only nationality but also lifestyle. People with families and the elderly continue to look for homes on Rose Hill, in Pasarét and the 12th district if they want something exclusive. The young, however, prefer moving to the busy Pest side.

"To define where an exclusive property begins, I would draw the line between the 6-700,000 forints (2400-2800 euros) per square metre limit," says Dávid Valkó, senior analyst of estate agents Otthon Centrum. "Hungarian clients want an exclusive property to include a living room of at least 30 square metres and bedrooms larger than 12 square metres. They also want walk-in wardrobes, though that's what the average customer requires as a matter of course. The toilet has to be separate from the bathroom and quality materials should be used throughout the flat. A large apartment should naturally contain several bathrooms. On the Buda side a fireplace is a must, and it is good for the property to have a view. The latter can represent a huge price difference, even if you have to lean far out of the window to see something of the Danube."

A large amount of space is the key element. A flat should be spacious in width, length and height - a threemetre interior height is considered a convincing marketing tool - and it is positive if large areas can be seen from the windows. Communal facilities, which were popular even a couple of years ago, have slowly lost their attraction. People have become more reserved and it is not sure they would want to take a sauna in a common fitness room. In addition, monthly joint expenses amounting to several tens of thousands of forints reduce the attraction of communal existence.

Official statistics put the number of foreigners who have purchased property in Budapest at nearly 2000 each year, though this figure does not include those who, for tax reasons, have preferred to buy flats via a company. In reality the figure is several times higher. The Hungarian capital continues to be a popular housing investment target, because, unlike in the neighbouring countries, the 'housing bubble' has not yet developed. Prices are still expected to rise and thus there is still scope for development.

"If we consider the past fifteen years, prices have grown each year," says Csaba Bodor, Head of OC International Client Services. "Sometimes 20 and sometimes only 1 per cent, but they have always increased." Furthermore, the city centre on the Pest side is becoming more and more beautiful. Think of all the districts undergoing renewal or the residential buildings by the Danube 'discovered' a few years ago. According to Csaba Bodor, foreign investors prefer buying 'off plan', so by the time the building is completed they have already gained something on the deal. Hungarians, in contrast, prefer to see the property they buy in its real physical existence. In the past ten years it has mainly been the British, Spanish, Israelis and Irish who have been seeking properties in Hungary, but in more recent times South African, Danish, Norwegian and even Iranian investors have also appeared. They usually expect what Hungarians may not want - a 24-hour reception service, an indoor pool or a sauna. It does no harm if there is some 'added value', involving, for example, the location of the flat or hotel-like services.

What is being constructed at Kodály Circus in Pest, if not yet in the luxury category, can easily compete with any European city. Under the name of Andrássy Palace Gardens, former top-class residential buildings on the Circus are being converted into 21st-century dream apartments with a roof pool and equipment which would be considered luxurious in London or Paris.

"One investor put down a deposit on an apartment and then went and looked around in other European cities to see whether there was something similar elsewhere," says Csaba Bodor. "He returned saying that it simply didn't exist."

Construction is beginning soon and the new owners should be able to move in during 2010. According to experts, the current prices of around 4000 euros per square metre should be one and a half times more by then.

A. N.