Foreign Demand For Real Estate Falls In Hungary

By Boma Oduma






With unrealistic expectations for the performance of the residential real estate market in Hungary leading up to the nation’s EU accession in May, 2004, demand for Hungarian real estate by foreigners has taken a downward turn. Before accession, anticipation for increased foreign interest was very high in Hungary. The expectation drove developers to start new projects with some of them successfully developed in less than a year. An example of this tremendous success is the Duna-pest residences in Budapest’s district IX, which managed to complete 90% of its apartments in less than a year.

Although the residential market enjoyed the enormous benefit between 1997 and 2004 of catapulted real estate prices thanks in large part to foreign investment – most notably by the Irish – by the end of 2004 the market as a whole began to encounter less interest from foreigner investors.

“The increase did not reflect local investment,” said Andor Szel of Central Home, a leading Budapest realtor that specializes in selling downtown flats to foreign investors, “and, likewise, the downturn does not really reflect the Hungarian economy either, which is in fact growing.”

The 1990’s saw a great influx of German, Italian, and Israeli investors coming into Hungary as the market first opened to foreign buyers, according to the Central Home website. Rental income reached levels around 12%. With these days past and gone, however, foreign investors are turning away from Hungary, pitching their tents and their presence in Dubai, among other places, which appear to be more favourable at the moment. Dubai’s real estate popularity with foreign investors stems in part from coverage in British media: an exposure sorely missed by Budapest, even by the media of its most recent investors - the Scandinavians, the Spanish, and the Brits – whose general public lack the awareness of Budapest as a possible place of investment.

A vital issue for choosing a country of investment is access to local mortgages. Unfortunately, Hungarian mortgages are not easily accessible: with high interest rates, it is quite difficult for investors to purchase real estate and to invest in Hungary.

“Mortgage facilities in Hungary are not functioning well,” said Szel. “Due to economic pressures, it is very difficult to obtain mortgages from local banks. And those that are available come with very high interest rates, thereby discouraging locals from buying.”

The loan ratio is also relatively low in Hungary when compared to other western European countries, which likewise keeps down the relative prices of Hungarian real estate. Citizens as well as foreigners are affected by this fact, which holds back private investment. In Britain, there is an open possibility to take a British mortgage for a foreign investment, which gives British investors a comparative advantage so long as interest rates in Hungary stay high.

All hopes are not completely lost, as there are high expectations for 2007 regarding the reduction of interest rates for Hungarian mortgages. This promises to enhance the allure of the real estate market, churning forth a new wave of investors in Hungary since other market factors are indeed quite favourable. These include a fully-implemented computerized real estate register - unlike other countries in the region where printed documents are required as valid proof of ownership - as well as an availability of potential investments that outstrips more saturated markets in Western Europe.

Counterterrorism In Budapest

By Philipp Sigrist

“International terrorism is a growing problem in our world today. We need to learn how to fight it”- this was the slogan at the first conference of the International Anti Terrorism Association (I.A.A) that was held in the Art Palace of Budapest on the third of March 2006. Eight experts in the field held the six hours conference for the stated purpose of discussing terrorism and its various side effects.

International terrorism has become a growing concern in today’s world. It has attracted the attention of many different organizations and prompted the creation of many others, including the International Antiterrorist Association (I.A.A), which was formed in Hungary in June of 2006, which recently hosted a six-hour conference in Budapest. The eight speakers – which included a Hungarian army general and an Police expert on explosives - provided insights on the issues surrounding and giving birth to terrorism, and on the sophistication and reach achieved by today’s terrorists.

General Szabo was the first speaker to the podium. His speech concerned largely international security and its challenges. He pointed out various threats and how they can be solved.

First, he said, the dangers today are more complicated than before, specifying that in today’s world of globalization previous dangers are even more dangerous because of technological development. Local, National, and International problems, he said, are all connected with each other, and an increasing gap between rich and poor countries raises the danger of organized crime and terrorism in developing countries.

“International terrorism is so powerful,” said the general, “that it influences relations between nations. The sobering disadvantage of globalization is that it is easily abused, especially economically. After the fall of communism, criminal organizations grew rapidly throughout the eastern block. This resulted in Hungary becoming a drug transit country. Corruption often occurs in changing political systems. Populations grow older and pensions come under threat. Flooding and other natural catastrophes compound these difficulties. How can these problems be solved? First of all more information is needed. Organizations must function more efficiently and international problems will find international solutions. But most importantly we have to understand the way terrorists think, get to know their philosophies, structures, financial assets, as well as their goals. To understand the way they endanger can be treated like a science.”

The general concluded by saying that any kind of problem can be easily challenged if it is tackled as early as possible. To this end, he advocated avoidance rather than confrontation, assuring his audience that the necessary counterterrorism organizations will be formed in the near future.

The second speaker emphasized attacks conducted with explosives. Unlike the general, he took the view that terrorism is an ongoing war, rather than a problem to be addressed and prevented.

The number of suicide bombers, he said, has grown dramatically in recent years. He specifically stated several places where attacks had been carried out and described the results of these attacks. One example he gave was a bomb attack in Tunisia specifically aimed at tourists in order to destabilize the country. Interestingly, attackers often manage to penetrate high security zones such as in Saudi-Arabia, Iraq and Israel, he said, adding that whatever security protection there is, attackers often manage to break through checkpoints and other barriers.

“The Madrid bombing showed that attacks have become very well organized,” he said, “The bombings did not only become more sophisticated but also more ruthless. During the Bezlan siege for example, terrorists did not stop from killing children. Terrorism is constantly evolving technologically, monetarily as well as in popularity. It began with simple bombs, but today terrorists can be in possession of dirty bombs such as chlorine or even nuclear waste bombs. But the biggest fear is that one day that terrorists might have access to a working nuclear bomb.”

A speaker from the police raised issues relating to crisis management in the case of an emergency. He used a recent local event as example, the October 6 riots in Budapest.

“Theoretically it seemed perfectly manageable and controllable,” he said “but in practice everything turned out to be completely different.”

Since the police did not have much experience with riot control, it had to learned through trail and error. An attack on Hungary can result in similar failures, he added, since police forces are not experienced enough for such tasks, as they have never happened before.

The final speaker, the head of the I.A.A Tamas Lax ended the conference by summing up the various speeches and made one final conclusive statement. “The international community can fight terrorism if the necessary institutions and agencies efficiently work together with their governments, but the responsibility also lies within each individual”.

Eyes Open To Windows Vista

By
Ugo Eriobuna
and
David Valker




Microsoft has long promoted itself as being about helping individuals and communities around the globe with the mission of enabling new avenues of social and economic opportunity extending particularly to the estimated 5 billion people that have yet to realize the benefits of technological advance. The multinational company’s tools to achieve this are transforming education, fostering local innovation, and enabling jobs and opportunities to create a continuous cycle of sustained social economic growth for everyone. While achieving these goals currently remains a distant prospect, thirty years ago the dream of a PC in every middle-income home seemed likewise impossible. Today, with Microsoft having reached more than one billion users, life has changed profoundly: information is more readily available, connections are more easily made and commerce is more quickly undertaken. Bill Gates - along with his company – has indeed moved closer to his goals.

The latest move is called Windows Vista. Naturally, it contains a dazzling array of new features; some of the most significant include an updated graphical user interface and visual style called Windows Aero. Aero uses graphics hardware to add translucent boarders to your windows. Windows Aero builds on the basic Windows Vista user experience and offers Microsoft’s best-designed, highest-performing desktop experience. Using Aero requires a PC with a compatible graphics adaptor and running a Premium or Business edition of Vista. László Vajgel, working for Fourcut, an editing studio, when asked his views on Vista he said:

“There have been a lot of changes in the new software,” said László Vajgel, of Fourcut, an editing studio in Budapest, Hungary. “The buttons and functions I got used to in XP are not quite the same in Vista.”

Vajgel also expressed doubts about the number of people actually making the switch to the new software in his home market of Hungary.

“Most people here use, well - what is a nice way to say - ‘unlicensed products.,’” he said. “This cuts off the biggest share of buyers. Also, people don’t think that the product is that good at first.”

Steven J. Vaughan-Nichols, editor of the US-based Ziff Davis’ Internet Linux & Open Source expressed his own views.

“Vista will be better than XP, which has easily been Microsoft's best desktop operating system to date,” Vaughan-Nichols said. “However, Vista also requires far more hardware oomph than previous Windows systems. I'd say Intel's recommendations are pretty much a minimum for Vista. I would only add that if you expect to see the fancy desktop, you need to invest.”

On the other hand, companies, institutions, and business organizations can afford to use this new software at the moment in Hungary. Most individual users living in Budapest think it is too costly and prefer to wait till the price value comes down. Moreover, as could be seen from the release of previous Microsoft operating systems, they always need some adjustments. In addition, the product is only useable after a few months of real testing by users.

The testing process by real users won’t make Microsoft weaker, as people opposing “going global” hope. Vista continues the path, started in 1975, in which the computer transformed from an awkward, unfriendly machine to our everyday instrument and “friend”.