SIMILAR ARTICLES

What Romania exported and imported in 2017. Some observations

According to INS data, last year, the automotive industry was the driver of Romanian exports, with about EUR 9.6 billion, of a total of EUR… Mai mult

Real salary goes “down to Earth”. Health and education are still Cinderella

The average gross salary earning announced by the INS for February 2018 was 4,128 lei, 0.4% lower than in the previous month. Paradoxically, the net… Mai mult

EU tax harmonization plan may have negative effects on Romania. Bucharest – totally unprepared

European authorities are taking increasingly decisive steps towards tax harmonization of the 27 systems remained in the EU, but the new measures may have negative… Mai mult

Beware of who bears the burden: Atypical arrangement of wage cost increase in Romania in 2017

Romania ranked first in the EU in 2017 by the labour cost increase, according to data published by Eurostat. With an increase of +15% in… Mai mult

A ruthless table: Number of Romanians who obtain citizenships in other EU countries is growing more than those who run away from dictatorships

The number of Romanians who obtain citizenships in other EU countries keeps growing. Only in 2016, 29,700 people swore to another member state, compared to… Mai mult

Romania fulfils again stability requirements (a near-miss) in terms of housing price increase

de Marin Pana , 16.4.2018

According to the revised data published by Eurostat, Romania has fulfilled again (a near-miss) the macro stability requirement set at the European level for the increase in the price of housing.

With an arithmetic mean of 6% for the whole of 2017 and a value declining to 5.6% in the fourth quarter, we were in line with the requirement of no more than 6% increase, year on year, in real estate sector prices.

We remind that our country had reached 13 of the 14 stability criteria met in 2015 (the one regarding the net investment position cannot be achieved given the massive foreign investments made in our country and the quasi-inexistent Romanian investment abroad) and it is already foreseen, as a planned loss, the criterion regarding the labour unit cost increase (it is calculated for a period of three years and has a reference set at 12%, which we can no longer meet following the salary increases decided in 2016 and 2017).

  • We also present developments in other countries from the former socialist bloc, as well as in Germany, France, and the significant averages at the EU level, to see how we position ourselves at this sensitive indicator. It can be seen that we are obviously better than our neighbours Bulgaria and Hungary, and even better than the Czech Republic and two of the three Baltic countries.
    *
  • Evolution of housing prices in 2017
  • Country           Q1       Q2       Q3       Q4       Average
    *

Our model, though, should be Poland, which just follows discreetly but with maximum efficiency, the European trend and had precisely the same value, calculated as an arithmetic mean (values have not been adjusted seasonally, according to Eurostat), as well as the Eurozone.

An area where Germany and France set the tone in this matter, with a trend somewhere below four percent (with the mention that the former was on a declining trend and the second on a growth trend so that their positions exchanged in the last quarter of the year). Estonia also managed to temper its momentum with which it started last year and to keep a reasonable distance from the threshold set.

Noteworthy, calculations have been remade slightly downward for the whole Union compared to those in mid-January this year (respectively, from 4.1% to 4.0% weighted by Eurozone seasonality and from 4.6% to 4.5% for EU 28), as specified by the EU statistical body.

In this European context, especially given the increases in income and inflation at the national level, we should be very cautious with the real estate market prices. Especially that not even are we objectively pushed to the limit of the macroeconomic stability (as it has been established theoretically) but we are also working with housing prices traditionally expressed in euros and we have not adopted the single currency.

But euro stood in the first quarter of the year significantly above the target in the official forecast considered as the basis for the 2018 budget (4.59 lei/euro, revised from 4.56 lei but 4.65 – 4.66 lei as a monthly average in January, February and March), with a marginal growth trend.

Basically, we have here an important factor of economic stability that we should better keep track of more carefully and maintain it under control as much as we can with administrative means that could take on potential outbreaks of the market.

The alternative is that the implications of any potential real estate bubble may not suit us at all.

Mergeți în homepage ›

Publicat la data de 16.4.2018

Lăsați un comentariu


NEWS

Industrial production, up 7% in first two months of 2018, compared to the same period of last year

Industrial production (gross series) was up 7% in the first two months of 2018 compared to the same period in 2017, following the growth in… Mai mult

Deloitte study: Romania vs. EU - Tax rules applied to losses from selling bad loans

Deloitte Romania, at the request of the Romanian Banking Association, conducted a study for analysing the tax treatment of the sale of receivables and the… Mai mult

Transgaz, favourite to take over Greek natural gas transport operator

The US and the EU support Transgaz-Reganosa (Spain) offer to take over the Greek natural gas transport operator DESFA, for geopolitical reasons, the Greek media… Mai mult

Workforce (i)mobility: Unemployed young Romanians are not willing to move to another locality for a job

Romania has one of the highest percentages of young unemployed people who would not leave their hometown to find a job (either in the country… Mai mult

Unions: State will pay detainees between EUR 370 -550 million

Total compensation that the state will pay to detainees who have been imprisoned in improper conditions will be between EUR 370 million (in the case… Mai mult

Schweighofer sells forest domains owned in Romania and only keeps processing activities

Schweighofer Group, one of the European leaders in wood processing, announced on Monday "a strategy change": it sells its subsidiary Cascade Empire S.R.L. (Cascade Empire)… Mai mult

Dancila government has established "Commission for Preparing Changeover to Euro". Another committee has been already doing the same thing for a year and a half

On Wednesday, the Government adopted an Ordinance aimed at establishing a commission for preparing the timetable for Romania's accession to the single European currency. Prime… Mai mult

Mangalia Shipyard: Agreement between Ministry of Economy and Damen. Dutch buy Daewoo shares, give state 2%

The state has reached an agreement with Damen Shipyards Group after blocking for several months the takeover by Dutch company of Daewoo's shares at Mangalia… Mai mult

CCR judges are no longer willing to participate in MCV assessments

The President of the Constitutional Court (CCR) has communicated to the European Commission (EC) delegation the fact that "the Court plenary expressed its wish not… Mai mult

Five priorities of the Coalition for the Development of Romania presented to Dancila government

Representatives of the Coalition for the Development of Romania (CDR), an initiative of the Romanian business community coordinated since the beginning of this year by… Mai mult

Romania to host regional centre for endowment of Black Hawk helicopters for Central Europe

Romaero and American company Sikorsky, part of the Lockheed Martin group, have signed an industrial partnership agreement that will lead to the establishment of a… Mai mult

State-owned companies forced to participate in public tenders

The Government approved on Thursday a memorandum that includes a series of measures targeting publicly owned or controlled companies. Basically, the document forces the state-owned… Mai mult

Country Report - European Semester: Romania risks a tough economy landing at change of cycle, because of growth model

"In the absence of structural reforms and fiscal consolidation, Romania's strong economic growth risks creating the conditions of a tough landing," in case of a… Mai mult

Governance and Congress: Prime Minister Dancila appointed PSD Vaslui and Neamt leaders’ sons as state secretaries

Prime Minister Viorica Dancila, who is aspiring to the position of PSD executive president, promoted the sons of PSD Vaslui and Neamt presidents to government… Mai mult

Monopoly on natural gas market in Romania: Interests supported by deputy Iulian Iancu push Romania to an open conflict with European Commission

The European Commission will sue Romania at the European Court of Justice if the Parliament in Bucharest adopts the amendments to the Emergency Ordinance 64/2016… Mai mult