Coming to a new place, you might wonder which part of the city you should invest in. Budapest is a huge city with conditions ranging from run-down housing project areas to complete villas overlooking the river. Naturally, the prices reflect these conditions but there are also trends that influence the market. For example, in late 2003 and early 2004 downtown flats were relatively expensive and the ones in the suburbs much cheaper. But in 2004, suddenly Hungarians started preferring to live in the green suburbs and downtown prices fell. In 2004 over 200,000 people moved out of the city to suburbs and neighboring towns. In terms of population, that is 10% of the entire city! This is an incredible change which inevitably influences the real estate market.

Therefore, downtown is a good place to buy. In any case, foreign investors are usually not interested in suburbian areas of Budapest so this is an ideal time for them to buy downtown. Low prices and no competition from the locals...

Obviously, downtown property prices are going to go up. There are many green suburbs which can keep growing farther and farther toward the wheat fields but there is only that much space in downtown Budapest. Today, you can still buy a large flat near the Hungarian Parliament for about 80 thousand pounds (=150 thousand dollars) which would be equivalent to getting something in London near the Westminster Abbey. Today in Budapest it is still only the matter of money because there are plenty of flats for sale.

There are several good potential areas to invest in Budapest. The Jewish quarter, for example, in the 7th district is one. This is the area where the old Ghetto used to be, from where hundreds of thousands of Jews have been deported. During the Communist period this area has been neglected and the houses today are in a bad shape. (We had a neighbor in one of our flats who had the ceiling collapse in his living room a couple of months ago. We also had a similar experience ourselves when a worker of ours fell through the wall into the neighbors kitchen while trying to run some wires in the wall.)

But it is clear that the Jewish quarter has a strong cultural significance for people of Jewish heritage from all over the world. In recent years, the area began receiving considerable government subsidies for architectural conservation. The Synagogue, which is at the entrance to the quarter, has also been recently restored and is a favorite tourist destination.

In terms of real estate prices, the Synagogue acts as a focal point for the area. The close you are to it, the higher the value of the property is. Property right next to the Synagogue can be very expensive, whereas two-three blocks into the Ghetto the prices are decidedly cheap. If you are looking for a long-term investment, perhaps buying in those unrestored areas would guarantee the highest increase in value. At the same time, you might be running the risk of having the ceiling collapse in the living room.

You must also be aware that the Synagogue is only one, though the biggest, of the several synagogues in the quarter and the other ones are in a terrible shape. Once the restoration of these begins, it is to be expected that the buildings will also get some help and property prices will go up.

A bit to the north of the Jewish quarter is the Kiraly Street, the restoration of which was just finished last month. This street runs from the Deak Square where the three metro lines meet all the way to the Music Academy and farther. Roughly parallel with it is the Andrassy Street which connects the city center with the Heroes Square. Although property prices on both Kiraly and Andrassy Streets have gone up considerably, the few blocks between them are still as they were 40 years ago. This area is very small and will most likely be restored in the near future. Then the prices will go up there too.