|
Archived Articles
Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.
He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.
In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.
Global Real Estate Project
|
 |
Hungary may restrict foreign investment in real estate
Foreigners see Hungary as a country ready to join the Europan Union within five years at the latest and thus the value of the property will be much higher, Orban said. He proposed to set a more coherent policy in the field of foreign ownership. He made clear that he would like to have such new policy of restrictions and regulations by the end of the year. His proposals followed a decision by the Budapest Office of Public Administration (OPA) setting a quota on property deals in a single year by foreign nationals on a country by country basis. For the time being the OPA decision will come into effect only in the capital, Budapest. The proposals made by the prime minister also echo the strong appeals from both sides of the Hungarian political spectrum to impose some sort of restrictions within the real estate market in order to protect the interests of the local population. Foreign ownership of real estate has long been a controversial issue in Hungary, where foreigners are barred from owning agricultural land and land in protected areas but are permitted to buy residential and commercial properties if possessing a special permit. Even if the country is among the most liberal East European states in this respect, Hungary still lies far behind the EU legislation. During the last two years Hungary closed more than two thirds of the chapters* in the negotiation process with the EU, and the former communist country expects to enter into the Union not later than 2004-2005. The last round of talks between Budapest and Brussels in the middle of June were particularly fruitful. This caused not only joy among Hungarians but also real concerns that EU membership will mean higher prices in the real estate market. Now prices for residential properties in Budapest vary between $500 and $3000 USD/sq.meter (1 sq.meter=10 sq. feet). In the bigger towns residential property prices vary between $200 and $1000 USD/sq.meter and in the small towns houses can be found for less than $200 dollars per sq.meter (see Perspective: Hungary). In neighboring Austria, which is a EU member, residential and commercial properties are on average 3-4 times more expensive than in Hungary. The aging but solvent Austrian population will be attracted by cheaper Hungarian houses. Keeping in mind that in the not so distant past the two nations lived in one state, and given the lack of any major cultural division between them, it is not difficult to predict that Hungary will become preferred place for those Austrian nationals and businesses who plan to settle abroad. The suggestions made by the Hungarian prime minister are dangerous because they indicate the lack of solid market culture among East European governments, even among the most western-oriented. When they face some social problem caused by liberal economic development their first reaction is to regulate the market, to curb its invisible hand in order to gain popularity. As we said in Eastern Europe and the fear of foreign investments, Eastern Europeans want western capital but fear the by-products which are linked to it. We can assume that other countries from the former Eastern block in similar situations will react in the same way as the day of entering the European Union approaches. The bigger the difference between real estate price levels in the candidate states and in their EU neighbors, the greater the temptation will be to regulate the market and to keep foreign investors at some distance. In this respect Hungary, Czech Republic and Poland, which share common borders with EU members Austria and Germany, will have problems similar to those of Bulgaria with its EU neighbor Greece. The second way of resolving new social problems is not to restrict the market forces but to accelerate the transition process. When you enter an economic block like EU, prices in the smaller newcomer countries inevitably tend to follow the general trends. The problem with the higher prices can be truly resolved only by means of higher salaries and this can be achieved only by attracting more and more foreign investments. Thus the foreign investment process shouldn't be restricted. Quite the contrary, it has to be accelerated in order to increase the living standard. --------------- * - There are 31 chapters in the negotiation process of becoming EU member such as Agriculture, Common Security and Foreign Policy, Education, etc. The purpose of these negotiations is to determine whether or not the candidate country has already applied the whole EU legislation in these particular areas (the whole EU legislation is around 80,000 pages). Only after completing negotiations in all 31 chapters, the EU and the candidate country can sign a treaty of membership which then has to be ratified by the national parliaments in all EU countries, by the parliament of the candidate country and by the European Parliament. The ratification process took around 18 months. So taking in mind the speed of the negotiations chapter by chapter you can determine in advance the date of the probable new membership.
--------------------
See also the directory of companies providing real estate services in, and general real estate information of Hungary.
|
See also:
