It's down to a combination of factors, " explains Joe Fahey of Overseas Property Investments (OPI). The real damage was further down river in Romania and Serbia. But thanks to its location and excellent anti-flooding measures, authorities in Budapest kept everything under control."

A combination of factors has also made Budapest one of the most popular locations for Irish investors hoping to cash in on an expected property boom, as Hungary moves towards full EU integration and currency convergence.

But while the city escaped the floods, it hasn't been immune to currency fluctuations, wild claims about capital appreciation and fears that the property market may be overheating.

Nonetheless, with several years' experience in the city, Fahey maintains an optimistic and balanced view of its property market and believes that Budapest offers investors great potential. As an economically vibrant, modern European city, which is rapidly renewing itself and seeing a lot of rejuvenation, capital appreciation is an inevitability, according to Fahey.

With one-bed properties selling for between 68,000 and 90,000, the market is clearly underpriced compared to the rest of Europe. Entry prices are comparatively low and there is plenty of scope for capital appreciation in the city.

?It is a full member of the EU, and based on a strong export performance with other EU members as well as the US, its economy is growing rapidly. Because of its political stability and steady economic growth, Hungary has attracted huge amounts of overseas investment and nearly all of the world's Top 50 corporations are represented in Budapest. All this adds up to a great location for investors."

Overseas Property Investments have been selling Budapest residential property to Irish investors for more than three years. In that time they have sold several high profile developments which have had record sales. Following recent success at Gozsdu Court, a redevelopment project in District 7, which saw very strong sales among Irish investors with a track record in overseas property, OPI is now promoting a new build project also in District 7, Dob Udvar.

These developments, Dob Udvar one and two, are completely new build apartments with a very high spec, and as a result they will command above average rentals, " says Fahey.

One beds in this location typically rent in the region of 500pm and two beds achieve 600; we expect to achieve these figures at a minimum."

The development is situated beside the Veterinary University and close to Andrassy Avenue with shops, restaurants and theatres, the Diplomatic Quarter and City Park, which also makes it an ideal rental location.

Comprised of two blocks of about 40 apartments each, the development will feature bright, spacious and modern units which will be very attractive to the top end of the rental market, according to Fahey.

Equally important for potential investors, OPI have contacts with property managers who can arrange rental in euro to avoid any potential difficulties due to currency fluctuations. Finance by way of a mortgage up to 65%, or bank lease up to 80% is available, and the contracts are fixed price in euro.

Construction is currently underway and handover will be in March 2007.

Price for a one-bed, 430sq ft with balcony is 68,000, while a two-bed, 700sq ft with balcony is 110,000. Prices include kitchen and bathroom fitout, and a basic furniture fitout package is available, starting at about 3,500 for a one-bed.

The Dob Udvar project will be featured in the Overseas Property Investments exhibition in the Glenroyal Hotel, Maynooth on Saturday and Sunday 29 and 30 April and Monday 1 May.