Good news and bad news

1. Good news may be on the way.
The inflation rate in 2016 will stay at 2.37 percent!
In the latest November figures, the annual inflation rate was 2.56 per cent!
My last forecast was for inflation at between 2.38 and 2.47 per cent.
However, this value is almost totally out of the question. At best, I think, it could slip to 2.38 percent!
This is a sensible advance, the best result since 2010, when inflation reached 2.81, and always stayed above 5 percent until 2014, reaching a new peak in 2014 of 6.05 per cent!
From then on, inflation began to come down.
By 2017, it should get worse again!
That should be the bad news!
2. The recovery of the gaming industry, coupled with the reclamation of land by the government, some not developed through the government’s own plans, will push the real estate sector to speculative values again.
Those who have had investments in the real estate sector have been waiting for a good opportunity to sell right away, and those with aspirations to buy a home, have been waiting for better times.
This “marriage” has triggered price increases in the market, as the DSF (Financial Services Bureau) figures show.
In December 2016, the bubble was above the “good” times of August 2014, when housing prices per square metre were 16.33 times higher than in the second quarter of 2003!
In December 2016, this ratio was 16.75 – versus 11.9 times in February of the same year!
Foolishness!
This scenario may continue to happen because the government is hampered by the indirect indexation of the pataca to the U.S. dollar. Bank deposits have been offering very low interest rates, so investors have been moving into the real economy, mainly real estate, with plenty of cheap money!
If the Government does not move to penalize sales of apartments for a much longer period than two years and control those who have unoccupied apartments without rational reasons other than speculation, it will not be able to control the market!
Economic policy must be used cleverly, as China knows so well how to do!
A few people cannot destroy the life of the majority of the community only because they have the capacity to play games in the real estate housing market!
Speculative behaviour and the resulting price increases destroy the economic fabric and the competitiveness of companies, and is an attack on the quality and safety of life of our community.
Speculative prices are a very strong factor of instability in this election year!