Useful Information about Hungary
Index to Useful Information about Hungary
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The following information is compiled to the best of our knowledge and in good faith. E&OE.
General
Overview
Hungary is a landlocked state with many neighbours – Slovakia, Ukraine, Romania, Serbia, Croatia, Slovenia and Austria. It is mostly flat, with low mountains in the north. Lake Balaton, a popular tourist centre, is the largest lake in central Europe.
The ancestors of ethnic Hungarians were the Magyar tribes, who moved into the Carpathian Basin in 896, conquering the people already in the region. Hungary became a Christian kingdom under St Stephen in the year 1000. The Hungarian language is unlike the other neighbouring languages and is only distantly related to Finnish and Estonian.
The capital city, Budapest, which originally was two separate cities: Buda and Pest, straddles the River Danube. It is rich in history and culture and famed for its curative springs. Hungary has a single-chamber parliament or national assembly whose 386 members are elected by voters every four years.
Hungary has some limited natural resources (bauxite, coal, and natural gas), as well as fertile soils and arable land. Hungarian wines are drunk throughout Europe. The country‘s main manufactured exports include machinery and transport equipment, foodstuffs and chemicals.
Hungary is a highly musical country whose traditional folk music inspired its great composers such as Liszt, Bartók and Kodály.
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History
By 14 B.C., western Hungary was part of the Roman Empire's provinces of Pannonia and Dacia. The area east of the Danube was never part of the Roman Empire and was largely occupied by various Germanic and Asiatic peoples. In 896 all of Hungary was invaded by the Magyars, who founded a kingdom. Christianity was accepted during the reign of Stephen I (St. Stephen), 977–1038. A devastating invasion by the Mongols killed half of Hungary's population in 1241.
The peak of Hungary's great period of medieval power came during the reign of Louis I the Great (1342–1382), whose dominions touched the Baltic, Black, and Mediterranean seas. War with the Turks broke out in 1389, and for more than 100 years the Turks advanced through the Balkans. When the Turks smashed a Hungarian army in 1526, western and northern Hungary accepted Hapsburg rule to escape Turkish occupation. Transylvania became independent under Hungarian princes. Intermittent war with the Turks was waged until a peace treaty was signed in 1699.
After the suppression of the 1848 revolt, led by Louis Kossuth, against Hapsburg rule, the dual monarchy of Austria-Hungary was set up in 1867. The dual monarchy was defeated, along with the other Central Powers, in World War I. After a short-lived republic in 1918, the chaotic Communist rule of 1919 under Béla Kun ended with the Romanians occupying Budapest on Aug. 4, 1919. When the Romanians left, Adm. Nicholas Horthy entered the capital with a national army. The Treaty of Trianon of June 4, 1920, by which the Allies parcelled out Hungarian territories, cost Hungary 68% of its land and 58% of its population.
In World War II, Hungary allied with Germany, which aided the country in recovering lost territories. Following the German invasion of Russia on June 22, 1941, Hungary joined the attack against the Soviet Union, but withdrew in defeat from the eastern front by May 1943. Germany occupied the country for the remainder of the war and set up a puppet government. Hungarian Jews and Gypsies were sent to death camps. The German regime was driven out by the Soviets in 1944–1945.
By the Treaty of Paris (1947), Hungary had to give up all territory it had acquired since 1937 and to pay $300 million in reparations to the USSR, Czechoslovakia, and Yugoslavia. In 1948, the Communist Party, with the support of Soviet troops, seized control. Hungary was proclaimed a People's Republic and one-party state in 1949. Industry was nationalized, the land collectivized into state farms, and the opposition terrorized by the secret police. The terror, modelled after that of the USSR, reached its height with the trial and life imprisonment of József Cardinal Mindszenty, the leader of Hungary's Roman Catholics, in 1948. On Oct. 23, 1956, an anti-Communist revolution broke out in Budapest. To cope with it, the Communists set up a coalition government and called former Prime Minister Imre Nagy back to head the government. But he and most of his ministers sympathized with the anti-Communist opposition, and he declared Hungary a neutral power, withdrawing from the Warsaw Treaty and appealing to the United Nations for help. One of his ministers, János Kádár, established a counter regime and asked the USSR to send in military power. Soviet troops and tanks suppressed the revolution in bloody fighting after 190,000 people had fled the country. Under Kádár (1956–1988), Communist Hungary maintained more liberal policies in the economic and cultural spheres, and Hungary became the most liberal of the Soviet-bloc nations of Eastern Europe. Continuing his program of national reconciliation, Kádár emptied prisons, reformed the secret police, and eased travel restrictions.
In 1989, Hungary's Communists abandoned their monopoly on power voluntarily, and the constitution was amended in Oct. 1989 to allow for a multiparty state. The last Soviet troops left Hungary in June 1991, thereby ending almost 47 years of military presence. The transition to a market economy proved difficult. In April 1999, Hungary became part of NATO, and in May 2004, it joined the EU. In 2006, Prime Minister Ferenc Gyurcsány was re-elected on a platform promising economic “reform without austerity.” In September, a tape was leaked to the media on which Prime Minister Gyurcsany admitted that he blatantly lied about the state of the economy to win re-election. Antigovernment demonstrators rioted and demanded his resignation.
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Geography
Hungary is situated in the centre of Europe in what is known as the Carpathian basin. The total surface areas covered by Hungary is 93,000 km² making it one of the smaller countries in Europe.
Hungary is one of the few countries in Europe with a geography that is completely landlocked, meaning it has no coast. The nearest geographically located sea from Hungary is the Aegean Sea located off the coast of Croatia. Hungary’s centrally located geography in Europe means it borders several other countries. Hungary has land borders with seven other European countries; Austria, Slovakia and Ukraine to the north, Croatia and Yugoslavia to the south, Romania to the east and Slovenia to the west.
Although Hungary isn’t a huge country geographically speaking, it does incorporate within its borders a reasonably diverse array of landscapes and the climate in Hungary can vary considerably as well. The mountainous and hilly areas in Hungary are to be found in the north of the country as well as hilly areas in Transdubia which are located in the west of Hungary. A great proportion of the geographical land mass of Hungary is taken up by the Great Plains located in central and eastern Hungary, where the lie of the land is generally low and flat.
The geography of Hungary is blessed with several rivers of considerable size, the largest of which is the River Danube which runs through the country from the north to the south splitting the capital of Budapest in two. The River Danube combined with Hungary’s other main river of Tisza stretch for over 1000km in Hungary alone. Other significant rivers featuring on the geographical map of Hungary are the Raba and Drava located in the west and south west of the country. Hungary also has a vast number of lakes dotted around the country, the largest of which is Lake Balaton located in the centre west of Hungary. Lake Balaton is a popular place for camping in Hungary.
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Climate
Hungary has a temperate continental climate with Mediterranean and Atlantic influences. Depending on the location, winters can be cold, cloudy and damp or windy, the summers warm and sometimes very hot. May, June and November are the rainiest months, although more rain usually falls in the west and Southwest than in the east. The number of hours of sunshine a year varies between 1900 and 2500 – among the highest in Europe. From April to the end of September, you can expect the sun to shine for about 10 hours a day. July is the hottest month (average temperature 23.2° C) and January the coldest (-1.3° C). The average annual temperature is 11° C.
Every season has its attractions in Hungary, though a winter on the puszta sounds a lot more romantic than it actually is. Though it can get pretty wet in May and early June, spring is just super in Hungary, it looks and smells and feels like it did when you were a kid. Summer is warm and sunny and unusually long, but the resorts are crowded. If you avoid Lake Balaton, you’ll do OK. The summer fashions and beachwear are daringly brief in summer even by Western standards. Like Paris, Budapest comes to a grinding halt in August.
Autumn is beautiful, particularly in the hills around Budapest and in the north. In Transdanubia and on the Great Plain its harvest and vintage time.
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Culture & People
The ancient Magyars had a rich folk culture, which incorporated Eastern themes into its folktales, art, and music. Following the Hungarian conversion to Christianity in the 10th century, pagan and Eastern cultural elements were replaced by Western cultural and social patterns, and Latin became the official and literary language. During the 15th century Italian artists and scholars introduced the humanistic Renaissance into Hungarian culture. In the 16th century Hungarian replaced Latin. In the 18th and 19th centuries Hungary absorbed the Age of Enlightenment and Western European liberalism. The early 20th century saw the rise of the “West” school of Hungarian intellectuals, who favoured the integration of Hungarian cultural elements with modern Western culture. After World War II (1939-1945) the Communist regime made efforts to pattern Hungarian culture after that of the USSR.
The cultural milieu of Hungary is a result of the diverse mix of genuine Hungarian peasant culture and the cosmopolitan culture of an influential German and Jewish urban population. Both the coffeehouse (as meeting place for intellectuals) and Gypsy music also have had an impact. Cultural life traditionally has been highly political since national culture became the sine qua non of belated nation building from the early 19th century. Theatre, opera, and literature in particular played crucial roles in developing national consciousness. Poets and writers, especially in crisis situations, became national heroes and prophets. Governments also attempted to influence cultural life through subsidy and regulation. During the state socialist era culture was strictly controlled; party interference was influenced by ideological principles, and mass culture was promoted.
Hungary's most traditional cultural element is its cuisine. Hungarian food is very rich, and red meat is frequently used as an ingredient. Goulash (gulyás), bean soup with smoked meat, and beef stew are national dishes. The most distinctive element of Hungarian cuisine is paprika, a spice made from the pods of chilli peppers (Capsicum annum). Paprika is not native to Hungary—having been imported either from Spain, India by way of the Turks, or the Americas—but it is a fixture on most dining tables in Hungary and an important export. Among Hungary's spicy dishes are halászle, a fish soup, and lecsó, made with hot paprika, tomato, and sausage. Homemade spirits, including various fruit brandies (pálinka), are popular. Before World War II, Hungary was a wine-drinking country, but beer has become increasingly prevalent. Although Hungarians were not quick to accept them, foreign cuisines appeared in Budapest from the 1990s, a sign of the growing influence of the outside world.
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Why Hungary for Investors
Why Invest in Hungary
With Hungary’s entry into the EU in May 2004, supported by further liberalisation, its capital Budapest is on its way to becoming one of the biggest economic engines of Eastern Europe. With its architectural beauty and financial growth, it has become an ideal target for investors.
Two million of Hungary’s total population of 10,300,000 live in Budapest, the city known as the ‘pearl of the Danube’. Since the two regions of Buda and Pest were unified in 1873, the resulting city has developed into the cosmopolitan metropolis of today. A cultural Mecca, Budapest offers a staggering 237 monuments, 223 museums and galleries, 35 theatres, 90 cinemas, 2 opera houses and 12 concert halls. The public transport system of underground, trams and buses is among the best in Europe.
Compared with other EU countries, property prices in Hungary are relatively low with the average price of a property in Dublin being more than four times the price of its Hungarian equivalent. Picture Ireland, and in particular Dublin, ten years ago – this is where many economists and property experts believe Budapest to be at present.
Hungarian investors have experienced unprecedented growths in their property values in recent years. Typical levels of appreciation for properties in well-located areas have been seen at 10% up to 15% per annum, and coupled with an average rental yield of 6%-8% for an apartment; Hungary is an exciting investment to add to your portfolio.
Since Hungary joined the European Union back in 2004 the country has seen a 0.8% increase in GDP growth rate, a 1% increase in the rate of industrial output and has seen foreign direct investment surge as international confidence in Hungary grows. Of the foreign direct investment flowing into Hungary, 70% of the money is targeted on Budapest; furthermore Budapest is where 60% of Hungary’s commercial activity takes place.
As a direct result of these facts Budapest’s population is growing rapidly annually as more jobs are created, as more companies expand and establish in Budapest and as more professionals and workers arrive from other Hungarian regions and from abroad.
This growth in population is already pushing up the demand for property to rent faster than new housing units are coming onto the market. Furthermore, of the established apartment real estate available in Budapest, in excess of 30% of all units require major renovation so the demand for quality accommodation is intense.
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Where to Invest
Property investment in Hungary is mainly cantered on the capital city of Budapest where prices are currently at least 25% cheaper than similarly attractive European cities like Prague and where property prices in the most desirable districts rose by up to 15% last year.
The Budapest real estate sector offers investors long term rental income generating opportunities as well as medium to long term capital growth potential. And those looking for an emerging market opportunity within an emerging market economy could consider targeting the tourism and second home markets in Hungary for profit and income as well.
Rental rates have been rising in Budapest for the past few years already and as the local population’s purchasing power begins to increase as a result of having access to more, better paying jobs, so this increase can continue to be sustainable.
Brand new off plan property developments in Budapest are selling out rapidly upon release. Buyers consist of overseas real estate investors seeking to buy low and flip on completion, property investors buying multiple units to rent out for an income and there is also a strong local demand for property to purchase which gives an investor a strong resale domestic market. This means that the profitability of a property investment made in Budapest can be realized by reselling - there is nothing worse than owning a property that you cannot resell after all.
In Sept 2007, the EU approved a total of €25 billion in EU funds to be invested in Hungary over the next 6 years to accelerate economic growth in the country. The effect of this huge influx of funding will be felt most keenly in Budapest.
EU experience shows that each €1 of public funding is matched by at least €1 of private sector investment. The effect of the EU’s massive investment in Hungary could thus see an additional€25 billion of private money invested in the country.
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Hungarian Economy
Hungary began its transition to a market economy earlier than other Central European economies, with a significant private sector developing well before the communist period ended. After some years of turbulence following the collapse of the Soviet bloc, Hungary began to build on these foundations, implementing structural reforms and stabilisation measures – resulting in an impressive macroeconomic performance by the end of the 1990s. However, in recent years results have been much more mixed and a period of large fiscal slippages is now threatening long-term growth and sustainability. The Government has adopted a new programme to address the situation.
Under communism, Hungary was an important manufacturing and engineering centre for electrical goods, chemicals and the automotive sector. This manufacturing base declined after the collapse of communism, but then recovered to power economic growth and attracted much foreign direct investment (FDI). Hungary has a relatively open economy, with export and import levels around 70% of GDP, a reflection of Hungary’s integration into the EU economy and supply chains. Following aggressive privatisation in the 1990s, the private sector now accounts for around 80% of GDP – one of the highest shares in the region.
During the last decade Hungary has made the transition from one-party state and largely command economy to multiparty democracy and market economy. The present government is the fifth to have been elected and the first to have been re-elected since the reintroduction of democracy in 1990. UK/Hungarian relations have become increasingly close and substantive over the last ten years. There is frequent, high level Governmental contact between the UK and Hungary.
The surge in interest by British exporters and investors during the 1990s reflects both the strength of the Hungarian economy and the country's early entry into the EU, which took place on May 1 2004.
Since the early 1990s the Hungarian economy has staged an impressive foreign investment- led recovery and although GDP growth has been declining during the last few years during the 2nd quarter of 2006 the Hungarian economy expanded by 3.6%.
The country's generally stable performance is reflected in growth in manufacturing output and productivity since 1998 and by the continued success of export industries. Many of these have received considerable foreign investment from a growing number of multinationals which see the country as a stable base for a wide range of activities.
Successive Hungarian Governments have pursued a policy of privatisation and deep reconstructing of traditional industries, with the result that over 80% of the economy is now privately owned. The process has now slowed significantly with only a few large organisations to be privatised in the forth-coming few years.
Hungary is a member of the EU, OECD, WTO and NATO.
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Expedia Property has also entered the Eastern European property market, as you will see we have a good selection of Hungary Property for sale. Try searching for Hungarian Real Estate on our website, we have a selection of Budapest Apartments for sale. |
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