Goulash Capitalism

[Daniel Wolf]

I just spent last week looking for a flat to rent in Budapest.  The
Hungarians have definitely put their own spin on the free market: foreigners
are expected to pay up to ten times the price that Hungarian nationals would
pay for rent in the city, and to make contracts in either Dollars or German
marks. Contracts are frequently made twice: one for the tax authorities,
with a false low rent (income from rentals is taxed at 20 percent) and one
with the actual price, to be paid in cash, of course.  Officially, Budapest
has an occupancy rate of 99 percent, but in fact the city is full of empty
houses and flats.  Many properties have been developed or renovated on
speculation based on future foreign occupants, while even more owners live
and work abroad, and privatization has also created a lot of absentee
owners.  Brokers are able to collect fees from both sellers/owners and
buyers/tenants.  And should you have a conflict over a contract, foreigners
should be prepared to wait up to five years for a hearing in a special court
and expect no more than 500 dollars in the unlikely even that compensation
is awarded.

That said, it remains a staggering, beautiful city, and the last decade has
been good for Budapest.  It makes one wonder if history would have turned
out otherwise had Byron the Bulb been born, as scheduled, along the Danube
instead of in Berlin...

Daniel Wolf
Frankfurt