The asking price, in Budapest's increasingly coveted riverside District XIII, was 9 million forints, just over pounds 25,000. What my friend Istvan really wanted was a flat with a patio and river view. But for that he would have to pay double, about pounds 50,000.
Now Hungary has joined Nato, and is set for European Union membership, many businessmen believe that buying a flat in Budapest is an excellent, low-risk investment.
The Pannonia Street flat was a pleasant place, perhaps the 10th that Istvan had visited in a hunt across the city. But it was not quite right. The kitchen was too small and the flat was on a corner on the raised ground floor between two busy thoroughfares. In the summer, when temperatures in central Europe can top 32C (90F), it would be impossible to open the windows without being overwhelmed by fumes.
But there was no need for him to worry. It is a buyers' market for Budapest flat- seekers. The classified daily newspaper Expressz is jammed with advertisements offering residencies, with some one-room studios at a starting price of 3 million forints.
Property prices in Budapest are far cheaper, not just than in similar Western cities, but also than in Warsaw or Prague. Most of Warsaw was systematically demolished by the retreating Nazis after the uprising in 1944, and has been rebuilt in a stark modern Socialist style, while Prague's historic centre is much smaller than Budapest's.
It is only since the collapse of Communism 10 years ago that flat buying, instead of renting, has become a practical option for many in Hungary. But the lack of mortgages and the difficulties for Hungarians of borrowing money at sensible interest rates mean that while prices are rising, they are cheap compared with the West.
The Pest side of the city is far more atmospheric than the swanky villas on the Buda hills - some of which can cost 90 million forints. Pest was mainly built up in the 19th century by architects following the Parisian model of densely packed apartment blocks.
Many were splendid multi-roomed edifices, where Hungarian barons and Hapsburg nobility would waltz the night away in fin de siecle balls and parties, the cigar smoke floating out over the Danube.
Sadly, most of these mini-palaces have long since been dismembered. Faced with a massive housing shortage, the Communists chopped up the former homes of the Hapsburg haute bourgeoisie. So most flat hunters are offered bizarrely shaped residences of two huge rooms, attached to a long, narrow corridor with a minuscule kitchen yards away.
Far-sighted buyers, entranced by the city's revival of cafe life and panoramic river views, buy up two neighbouring flats and knock the walls through.
"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," he said.
Foreign investors are pouring in to snap up as many flats as possible. One in five buyers is foreign, with the Germans leading the race, closely followed by the Israelis and Chinese. The Germans prefer the clean air of the Buda hills, while Israelis go for apartments around the wartime ghetto, in District VII, near the Great Synagogue on Dohany Street - the biggest synagogue in Europe. Some advertisements in Expressz for flats in District VII even specify "a view of the synagogue".
The buildings in the downtown areas are often pockmarked with sprays of bullet-holes around windows, and it is easy to imagine the last moments of a lone sniper ducking behind the wall, as he fired his final rounds at the Nazis in 1944, or the Russians in 1945. And for the Israelis moving back to Dohany Street, it is a homecoming of sorts.