“What we’ve learned is that a good reputation takes a long time to build, and can be ruined almost overnight.” This is roughly what a Hungarian property market analyst told us a couple days ago over the phone. This reputation is less important for the various rental markets, but it’s vital for investor confidence.
The Guardian has published a depressing, but thoughtful piece on the current plight of the region’s people and it’s the Hungarians and Latvians that come out as the biggest losers. It’s clear that the optimistic CEE narrative that drove yields down and further down for the past decade has ended. Hungary, and the rest of the region, needs to start creating a new one, before things can really begin to shift, or else these sorts of stories will continue to dominate the minds of editors and readers.
The financial and economic crisis was made in the west, but has hit hardest in the east. After years of growth far outstripping rates in the west, governments in Hungary, Latvia, and Romania have fallen, economies have slumped, and leaders have had to call in the salvage squads from the International Monetary Fund, whose tens of billions in bail-out funds are conditioned on swingeing budget cuts.