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How Lake Balaton is becoming a playground for the rich

A pile of money. (Government Accountability Office)
September 15, 2023

This article was originally published by Radio Free Europe/Radio Liberty and is reprinted with permission.

On the busiest day of the summer at Balaton, the biggest lake in Central and Eastern Europe, around 500 boats with thousands of crew members roast under the hot sun, while hundreds of spectators watch from the shore.

Held every year, a few days around the first full moon of July, the Blue Ribbon regatta is the country’s biggest sailing event, attracting hordes of tourists and sailors, who race around the 79-kilometer-long lake.

This year is no different, as the crowd packs into Balatonfured, a spa town on Balaton’s north shore, where the race starts and finishes. Well before the yachts set off at 11 a.m., shopkeepers and vendors were busy preparing ice cream and drinks for the crowd, who are now sweltering in the midday sun.

Due to travel restrictions, fuel shortages, then the plummet of the Hungarian forint, Lake Balaton became increasingly popular during the pandemic, leading to a huge increase in prices. The increasingly lucrative business at Balaton, dubbed the Hungarian sea in the landlocked country, resulted in the construction of massive new hotels, artificial beaches, and private sailing clubs.

But the lake’s popularity, its shift toward serving a wealthier crowd, plus Hungary’s rampant inflation, has meant beach snacks, not to mention affordable accommodation, are becoming luxuries at Balaton for the average Hungarian. Even many locals can’t afford to live there anymore, with some having no choice but to move away.

At a train station on the other side of the lake, in the town of Balatonfoldvar, a Canadian family waits for their train. The mother has ties to Hungary and, some 30 years ago, used to spend summers here by the lake. She echoes what many Hungarians are saying: Balaton is not cheap anymore.

Prices around the lake have risen by up to 15 percent. Beach food, such as langos, a deep-fried dough traditionally served with sour cream and cheese, have, in some places, nearly doubled in price. Hungary’s official inflation rate has been in the double digits since the coronavirus pandemic and now stands at 20 percent, after reaching a recent peak of 26 percent in January.

A foreign Canadian family is a rather unusual sight at Balaton. In Balatonfured, less than 25 percent of tourists were from outside Hungary in 2022, compared to 81 percent in Budapest. For foreign and Hungarian tourists, many destinations in Bulgaria, Greece, and Italy are now cheaper than Lake Balaton this summer, with room prices averaging around $75 a night.

And if you aren’t wealthy, don’t even think about buying a home. Property prices in the town have now caught up with the most popular tourist destination in the country, the capital, Budapest, says Fatime Major Bekefi, a real-estate agent in Balatonfured. While the town’s local residential population has been in decline since 2016, many wealthy Hungarians have bought second or third homes there.

Balatonfured’s promenade, which was previously filled with traditional pubs and family-oriented restaurants, is now home to a newly built, glass-walled organic winery, multiple nightclubs, and a renowned cafe with fancy baked goods and sandwiches. While these more exclusive establishments have always had a clientele in Balatonfured, they are increasingly uprooting the more modest ones.

“A lot of people moved away,” Major Bekefi said. “Not only because of the prices, but because of the [tourist] crowds that came to Balatonfured.” She was born and raised in Balatonfured and opened her business, Balaton World of Property, nine years ago. “It was a small town. But with the amount of people visiting, it doesn’t have the same character anymore. Especially in the summer,” she said. Many of the townspeople, she notes, have ended up moving to the surrounding villages.

With inflated property prices and high mortgage rates, young locals are struggling to buy property in Balatonfured, with most of them having to rent. That is also not easy, Major Bekefi says, as “there are few rental properties, and prices are up.” Many of the rental properties on the market target tourists and fall into the luxury category, with rent up to 400,000 forints ($1,190) per month. “A Balatonfured couple doesn’t earn that much,” she added, pointing out that apartments for around half of that amount are the most sought after.

With locals priced out of the market, many homeowners have placed their hopes on foreign buyers. That is in vain, though, Major Bekefi says. “Foreigners used to come here because they thought it was cheap. But it isn’t anymore,” she said.

From above, the lake appears as a turquoise-blue strip wedged between lush green fields and forests, while from the shore’s beaches, Balaton can look like sea, despite being only 14 kilometers across at its widest point. The northern side of the lake is known for its mountains and vineyards, while the southern, flatter side is popular for its shallow beaches. Nestled along the lakeshore, there are jewelry-box villages, which open up to reveal medieval churches and quaint traditional houses.

It isn’t just that locals can’t buy property in this Hungarian paradise. Many can’t even go to the beach. The majority of Balaton’s beaches are now gated, with fees for entry ranging from a few hundred to 10,000 forints. Refreshments are sold with huge markups. For people with a net salary of 240,000 forints ($710) a month, the average for the area according to 2020 data, these private beaches are largely inaccessible.

According to Roland Molnar, the president of the Association for Disadvantaged Youth of Veszprem, a city only 14 kilometers from Balaton, many young or low-income people often don’t even make it to the lake. According to a 2016 survey, only about half of the kids growing up near Balaton could swim. Molnar, who grew up in a children’s home, says many local kids wouldn’t be able to vacation on the lakeshore were it not for the camps operated by the government or churches.

In the last decades of the communist era, vacationing at Balaton was a mark of status: The biggest vacation retreat for the ruling Hungarian Socialist Workers’ Party was in the town of Aliga, the part of the lake closest to Budapest. The Soviet-style buildings still here housed, among others, communist Prime Ministers Matyas Rakosi and Janos Kadar and hosted Soviet leader Nikita Khrushchev in 1959, Soviet cosmonaut Yuri Gagarin in 1961, and Cuban President Fidel Castro in 1972.

This exclusivity remains today — and perhaps is even starker. “More Balaton, less Brussels,” long-serving right-wing Prime Minister Viktor Orban wrote on Facebook in 2020, while staying at a property in the village of Felsoors owned by his son-in-law, Tiborc Istvan. Orban’s family isn’t the only one. Many politicians from the ruling Fidesz party and their families own property near the lake: former Justice Minister Judit Varga has three properties in the village of Balatonhenye, while current Foreign Minister Peter Szijjarto also owns three in the town of Balatonederics.

According to reports in the Hungarian media, people close to Fidesz have been involved in dozens of new construction projects around the lake, including hotels, yacht clubs, and beaches. Among those new developments is a sailing club in Balatonfoldvar, a town on the southern shore, with trains running from Budapest every hour. In front of one of the town’s two beaches, there is an unfinished private sailing club, which was supported by the city’s Fidesz mayor. If completed, the private sailing club could shut off a part of the beach.

In power since 2010 and still popular with a majority of Hungarians, Orban and his Fidesz party have been accused, by critics at home and abroad, of democratic backsliding and corruption. In 2022, the European Parliament described Hungary as an “electoral autocracy.”

Many locals are fighting back against Balaton becoming a playground for the rich. “The beach belongs to the beachgoers,” said Karoly Herenyi, a sailor, local resident, and former acting president of the leftist Hungarian Democratic Forum.

Herenyi says that the original plan for a smaller sailing club, the second in the town, was first drafted in 2003 but abandoned in 2010. In 2019, right after local elections, a new, more ambitious idea emerged, with a plan for accommodating 175 boats.

Herenyi is the president of the Association for a Smiling Balatonfoldvar, a civic organization that focuses on keeping the town livable for locals. The group has successfully halted the construction of the sailing club in court several times, on the grounds that its backers did not consult with the local population or draft an environmental-impact plan.

“This sailing marina under construction has no license, or lawful background. It has been built against the law,” he said, adding that the city administration was looking for ways to make it legal retrospectively.

In the meantime, their association is looking for legal ways to renovate the beach by removing the two piers built for the sailing club. The beach used to attract 40,000 people a year, Herenyi says. It is currently free, and on a hot July afternoon, there are only a few dozen people. “There are generally less people [coming here now],” Herenyi said. “Not just because of the sailing club, but because people ran out of money. Especially with inflation on food around 35-40 percent, people can’t afford this.”

Herenyi also points out that by making the beach free, the city has lost out on around 4 million forints of potential revenue from the entrance fee, which used to be 1,000 forints (around $3) per person, an affordable sum for the average Hungarian.

As for the unfinished sailing club, if they have to pull it down, they will just move it to Csopak, a lakeside location where another marina is being built despite local objections, he says, quoting an unnamed source close to Fidesz.

Balaton locals also have concerns about the effects the new property developments could have on the environment. Building the marina would have environmental consequences for the entire lake, Herenyi says. Experts have long warned of the effects of pollution on the lake’s flora and fauna, which is home to countless endangered species, and the dangers of keeping the water levels artificially high, which can increase the risk of flooding. “Lake Balaton is on a ventilator,” Andras Zlinszky, a limnologist and conservationist, told RFE/RL’s Hungarian Service.

Andrea Tarrone Gyarmathy, a local apartment owner and resident, and Lorant Csomai, the founder of a new-wave cafe in Lovas, a village near Balatonfured, are both members of a local environmental NGO, the Coalition for Big Lakes, and have been active in calling out what they consider to be illegal new constructions.

“Water is the kidney of this region. If it ceases to operate properly, it will cause environmental damage, as well as sociological and economic harm,” said Csomai, who ran as an independent for the municipal council of Lovas in 2019. It’s not just the effects of new construction projects they are concerned about but also the increased traffic in the area. “[Some] people who now move here drive 250 kilometers every day to their jobs in the capital or other big cities,” Csomai said.

According to Csomai and Tarrone Gyarmathy, the environmental issues have been ignored by the current government. “They are taking away the opportunity to speak up on environmental issues,” Csomai added. “And thus, they created a chance to rob the Carpathian Basin of its natural resources and treasures.”

With the Coalition for Big Lakes, they are aiming to educate locals, as well as tourists and companies, about the environmental effects of these constructions. “[The restrictions] should have been reviewed 20 years ago. We are requesting [construction companies] to stop, rethink, to calculate the environmental effects and then take these calculations into account,” Tarrone Gyarmathy said.

For now, the crowds are still flocking to Balatonfured for the sailing regatta. In 2022, the town had 13,000 local inhabitants, and was the fifth-most-popular tourist destination in Hungary, with almost 100,000 nights spent by tourists every year. But there are signs that the high prices are starting to drive tourists away. This summer, tourism around the lake has decreased by 40 percent, according to Hungarian media reports.

As the owner of holiday rental apartments, Tarrone Gyarmathy says that, this year, her rooms are only booked up until mid-August. In 2022, she says, all of her apartments were booked for the entire summer by June. “Who are these massive hotels built for?” she asked. Hungarians who have enough money to spend here have already bought property, she says, or will go abroad, while less wealthy people have no money to spend on costly vacations due to the rampant inflation.

If the Balaton bubble does burst, local business owners are worried that — just as with the inflated prices and overcrowding — it will be mainly them who has to deal with the economic fallout and be left picking up the pieces.