SIMILAR ARTICLES

Labour cost: steepest and largest increase in the EU. And mostly concentrated on non-business sector

Romania recorded in the first quarter of 2018 the highest labour cost increase among all EU member states, according to data released by Eurostat. With… Mai mult

Company financing: Firms’ aversion to credit – at high levels. Most favourite banking product – account overdraft

The rise in interest rates and fees is becoming increasingly worrying for companies and maintains companies’ aversion to banking lending at high levels, according to… Mai mult

“Everything in One Hand” project continues: Law which pushes Court of Auditors beneath Administration’s feet – adopted

The Senate adopted on Thursday the draft amending Law 94/1992 on the organization and functioning of the Court of Auditors, which contains amendments that could… Mai mult

Government is hardly competing with private economy on banks’ money. Which are satisfied: less work, lower risks

  The volume of government credit has increased about 10 times over the last 10 years, and the share in total banking investment in Romania… Mai mult

Romania’s public debt – Level and evolution

Government debt service for 2019 will surely exceed the 2018 level, according to the projection made by the Ministry of Finance based on the debt… 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

Fitch confirms Romania's rating at BBB- but warns: fiscal loosening is risky for macroeconomic stability

Fitch Ratings confirmed on Friday Romania's rating for long-term foreign and local currency debt at BBB-, with a stable outlook, but warned that fiscal loosening… Mai mult

"We are working on a tax amnesty mechanism": announcement made by Minister of Finance

Finance Minister Eugen Teodorovici said at a press conference held in Bistrita that "a mechanism of this type is in progress”, a mechanism on tax… Mai mult

AOAR - Economy against new Criminal Code: businessmen denounce excessive protection provided to officials who cause damages to economy

The Businessmen’s Association of Romania (AOAR) asks the ruling coalition to explain the mechanism by which, after changes introduced on Wednesday in the Criminal Code,… Mai mult

Number of insolvencies increased by 12% in first five months. Suspended activities - plus 31%, dissolutions - plus 59%

The increase in the number of companies and PFAs in insolvency was 11.97% in the first five months of this year, compared to the same… Mai mult

Transport infrastructure in Romania needs EUR 70 billion - double as compared to existing resources

The investment needs in Romania's transport infrastructure exceed EUR 70 billion, while the available resources by 2030 are EUR 36 billion, according to the Transport… Mai mult

Refusal to work annuls entitlement to social assistance - bill voted in Chamber of Deputies

Deputies adopted a draft law on Wednesday whereby entitlement to social assistance ceases when a job is refused. The decision, Agerpres announced, was taken with… Mai mult

Subsidy of RON 900/month for employing a graduate based on contracts of indefinite duration

The National Agency for Employment (ANOFM) grants subsidies of RON 900/month to employers who employ graduates of educational institutions, with contracts of indefinite duration, within… Mai mult

C.P. Tariceanu, before the heads of Senates from EU: The European Commission has encouraged the parallel state, in Romania it is like in the 50's

Calin Popescu Tariceanu (foto) delivered a very tough speech on Friday, in the Senate, addressed to the European Commission, which he accused of encouraging the… Mai mult

National Bank of Romania wants to lower indebtedness limit in granting loans to individuals

The National Bank of Romania (BNR) sent to banks for consultation a draft amending Regulation 17/2012, which provides for a consistent lowering of the indebtedness… Mai mult

High impact provisions: Senate has adopted PSD-ALDE amendments to the Code of Criminal Procedure

Senators adopted on Wednesday the draft for amending the Code of Criminal Procedure, by 74 votes for to 28, against. The bill goes to the… Mai mult

RBL: Workforce crisis is worse than economic crisis - 3.4 million Romanians have left the country in last 10 years

Migration is one of the most serious problems facing Romania at this time, along with the lack of infrastructure. However, the return of Romanians to… Mai mult

World Bank: Romania's economy could grow by 5.1% in 2018

Romania's economy could grow by 5.1% in 2018, according to the World Bank summer forecast. The estimate has been improved by 0.6 percentage points above… Mai mult

Ministry of Energy: Natural gas from Black Sea will be exported through Onesti - Isaccea - Negru Voda network

The Ministry of Energy issued for Transgaz the construction permit for the consolidation of the transport system between Onesti (Bacau) and Isaccea (Tulcea) and for… Mai mult