The situation of real estate funds in Hungary

Abstract

This study is devoted to real estate funds, i.e. the major participants on the market of investment funds, which in the past years have become an area managing nearly HUF 500 billion. True, rapid boom was followed by a similarly rapid bust in this sector, where the value of savings dropped to half, i.e. to HUF 252 billion in November 2009. After presenting the impacts and factors of the financial crisis I will analyse in detail the disputed step taken by the Hungarian Financial Authority (HFSA) in November 2008 (suspension of real estate funds and the funds run by real estate funds), as well as the consequences of this move. During the analysis I am trying to find out what decisions real estate funds and legislators made in order to avoid the even more serious consequences. Finally, I will write about proposed operational and legislative changes to be considered on the basis of experience.