According to real estate analysts, Hungary has probably avoided the worst of the credit crunch, which sunk property prices in the United Kingdom, the United States and parts of continental Europe by dramatic proportions.

Hungary’s real estate market appears to have been quite fortunate in this regard for two reasons. First, lending and mortgage conditions have traditionally been stricter and as such, people in potentially precarious financial situations found it more difficult to find the funds to purchase a home that would have been out of their reach.

Second, property prices in Hungary were nowhere nearly as inflated and overvalued as those in the US and the UK.

Despite this positive news, Dávid Valkó, a financial analyst associated with the Hungarian firm Otthon Centrum, told an online news magazine that Hungary was in for rougher times this year. Land prices—even in trendy or up-and-coming areas-- have fallen back somewhat since the beginning of the year and foreign investors seem to be more hesitant about purchasing real estate in Hungary.

The real estate market also appears to be shifting and this may be a favourable development for smaller towns in rural Hungary. While requests for permits to construct new homes fell by 11 percent in Budapest, the nation’s capital ,during the first six months of the year, the number of permits actually increased by 10 percent in the rest of the country.

In total, Hungarian authorities handed out permits for the construction of nearly 21,000 homes in the first half of the year alone.

There is a clear preference in the Hungarian real estate market for newly built flats or homes, as opposed to units in older buildings. Yet those looking to take advantage of this situation may be in luck, as the prices of flats located in socialist era panel-style buildings (built in the 1970s and early 1980s) are expected to fall by 8 percent this year.

A number of these flats are conveniently located in and around Budapest, such as along Üllöi út, the main road leading out to Ferihegy Airport , or in Gazdagrét, a quiet, green area nestled among the Buda Hills.