Cafe society comes back to Budapest

ITS ONCE dilapidated streets are now tree-lined pedestrian precincts; formerly drab state-owned restaurants offer gourmet cuisine to rival London or Paris and bright new cafes, bedecked in post-modern murals, sprout on almost every corner.

Budapest is going back to the future: 100 years ago the Hungarian capital was the pride of the Austro-Hungarian empire, its fin de siecle glories renowned across Europe, as the studios of architects such as Gustave Eiffel constructed a modern metropolis, based on the Parisian model of grand avenues and sweeping boulevards.

The city is enjoying an urban renaissance after the drab decades of Marxist dictatorship. A new cosmopolitanism pervades the air, as immigrants from both east and west move to Hungary, positioning themselves for the country's expected entry to the EU, sometime early next century.

Gentrification has arrived in post-Communist Budapest, fuelled in large part by the increasing numbers of foreigners buying up cheap property and restoring the city's grandiose apartment blocks to their Hapsburg glory or opening bars, restaurants and luxury shops. Ten years after the collapse of Communism, Marx and Engels have long been replaced by Marks and Spencer.

One of the latest additions is the French-owned Cafe Vian, adjacent to the historic Ferenc Liszt music academy, a bright and light post-modern colourful venue, with its own stage for literary readings and jazz concerts. "We are part of the new generation of cafes, that take more care about what they offer their customers, and about their comfort. This is one of the few places in the city where you can have just a coffee or a cocktail, or a meal, and spend several hours with your friends," said co-owner Philippe Gallice, an investment consultant.

The city's renaissance is due in part to its visionary mayor, Gabor Demszky, whose forward-thinking urban planning has helped attract many millions of dollars worth of foreign capital, and also to a growing realisation that with central Europe's accession soon to the EU, Budapest will be a gate for the west eastwards, and vice-versa.

"Budapest is once again a fin de siecle city, and turning into a European metropolis," said Andras Torok, author of Budapest: A Critical Guide. "One hundred years ago the city was young and aspiring to the glories of Vienna, a competitor with gusto and energy. Budapest still has a sleeping beauty quality from the last century, but at the same time all the sophistication of the world has arrived, with the revolution in the culinary scene, new cafes and art cinemas."

All of which makes an enticing mix for apartment hunters. A combination of price and location has spurred on the Budapest property boom. There are few capitals in Europe where purchasers can buy a three-room period flat, complete with Hapsburg-era period fittings and high ceilings, for between pounds 20,000 and pounds 30,000; the prices are even lower in the more run- down quarters of the city that have yet to be revitalised.

Property prices in Budapest are much cheaper than in comparative capitals, such as Prague and Warsaw. Both these cities suffer from a shortage of residential property, and Budapest banks have yet to develop mortgages. Not surprisingly, foreign investors are flooding in.

Nationals from 53 different countries bought property in the capital last year, according to municipal officials. Almost one in five purchasers of Budapest flats is foreign. Leading the race - surprise, surprise - are Germans, followed by Israelis and Chinese. Germans tend to buy apartments and villas in the Buda hills, while Israelis gravitate to the traditionally Jewish streets around the Great Synagogue, the second largest in the world. While many Hungarians object to selling off farmland, especially in the Austrian border region, so far there is little backlash against foreigners in the capital. "This is gentrification without tears, a rare phenomenon," said Andras Torok.

While residents applaud the revival of traditions such as cafes and fine dining, the shopping malls and spreading US-style fast-food restaurants are less universally welcomed. Speaking last year on the anniversary of the failed 1956 national uprising, Sandor Lezsak, of the right-wing political party, the Hungarian Democratic Forum, compared the growth of western multi-nationals on Hungarian soil to the Soviet invaders.