HONG KONG -- Turbulence on China's equity market is starting to rock the country's property market. Investors are quickly pulling their cash out of housing they purchased to cover losses incurred by stock investments. Some have begun offering discounts on property due to difficulties with finding buyers. Continued turmoil on the stock market looks as though it will have a heavy impact on the country's real estate market.
Until recently, the property market showed signs of picking up in major cities and some regions, thanks in part to lower interest rates, eased home purchase restrictions and other measures taken by authorities. According to data released by the National Bureau of Statistics, prices for new houses, excluding those for low-income earners, in 70 major cities for May rose an average of 0.7% from the previous month. China Index Academy, a Chinese private think tank, said that house prices in 100 major cities rose for the second straight month in June on a month-on-month basis. In the first half of the year, China's home sales picked up 12.9% on the year, from the 5.1% increase for the five months through May.
Short-lived dream
China's stock market rally also helped drive up sales of domestic homes. The Shanghai Composite Index surged 60% from its low of around 3,200 in early March, rising to 5,166 logged on June 12. China Securities Depository and Clearing said that the number of accounts opened to trade yuan-denominated A-shares reached 980,000 in May in Shenzhen, where property prices are climbing faster than other areas. The figure accounted for roughly 80% of the total 1170,000 accounts in Guangdong Province, where large numbers of such account holders reside. Many newbie investors, who have just jumped into the stock market, likely gave a fresh impetus to the property market. China's share price upswing prompted investors to reach out for new investments, including houses and other properties. A property analyst at major Chinese brokerage Guotai Junan Securities said that sales of luxury properties worth over 10 million yuan ($1.61 million) each for the first half of the year topped annual sales last year in Shanghai and Beijing.
Ending in smoke?
After this, Chinese stocks began to crumble. In early July, the Shanghai Composite Index dropped more than 30%, after hitting a seven-year high in mid-June. Investors who suffered big losses on the stock market were forced to sell property and cancel real estate purchase agreements. The Hong Kong Economic Times said that consumers are increasingly asking real estate firms for grace periods on down payments for mortgage loans, as they run out of cash because of weak stocks. Some canceled home purchase contracts, while others canceled mortgage loans, according to China's largest property developer China Vanke, which has a strong foothold in Shenzhen. Local media reported that an official at China Vanke is concerned about massive numbers of cancellations in the future.
So if the Chinese try to offload all their Australian properties at once (each discounting in a race to the bottom), then that could cause a local real estate crash. Particularly if no more Chinese are buying, so discounted prices would be compounded by demand dropping significantly.
So if the Chinese try to offload all their Australian properties at once (each discounting in a race to the bottom), then that could cause a local real estate crash. Particularly if no more Chinese are buying, so discounted prices would be compounded by demand dropping significantly.
Hooray?
“Talk sense to a fool and he calls you foolish.” - Euripides
So if the Chinese try to offload all their Australian properties at once (each discounting in a race to the bottom), then that could cause a local real estate crash. Particularly if no more Chinese are buying, so discounted prices would be compounded by demand dropping significantly.
So if the Chinese try to offload all their Australian properties at once (each discounting in a race to the bottom), then that could cause a local real estate crash. Particularly if no more Chinese are buying, so discounted prices would be compounded by demand dropping significantly.
You might also get the exodus of capital from the market flooding our property and inflating property further.
Yes, I would think these Chinese stock market jitters would probably make the investors look for more trustworthy investments with more stability and maturity. I think they would see Aussie property as filling that criteria.
So if the Chinese try to offload all their Australian properties at once (each discounting in a race to the bottom), then that could cause a local real estate crash. Particularly if no more Chinese are buying, so discounted prices would be compounded by demand dropping significantly.
I think you will find all recent data shows large capital outflows of China as the economy continues to slow. I doubt Chinese rich enough to buy overseas will sell their insurance policy in other nations if things go belly up in China. Chinese buy overseas as an escape option should political events take a turn for the worse and for the future of there children. I think it would be the last asset they sell.
It is my opinion you will see an increase in Chinese buying overseas as the wealthy look for safe areas to park money as it seems China has no safe areas at present.
Yes, I would think these Chinese stock market jitters would probably make the investors look for more trustworthy investments with more stability and maturity. I think they would see Aussie property as filling that criteria.
Chinese don't look for those things, they look for ponzis. The Australian property market is right up their alley.
E.g.:
"Chinese financial speculators are caught in a buying frenzy for a variety of tea that has seen its prices soar to levels only rivalled by the finest wines.
The rare tea made from bushes from the tea gardens of the Ming Dynasty emperors has become the latest craze for wealthy Chinese investors with their sights on a quick profit.
Prices for the Dahongpao tea, which is only grown in a small mountainous area of east coast province of Fujian, have increased tenfold since the middle of last year with online tea traders selling a single kilo for more than £1,000, the country's state media has reported....."
Guise, China is only our #1 trading partners, but Joe Hockey has a plan B to simulate the economy with tax cuts. Everything will be fine. Trust me. I bought more shares after the Monday mini-crash. "Buy more when others are fearfully afraid". That's what my uncle Berskshire Warren told me.
It is my opinion you will see an increase in Chinese buying overseas as the wealthy look for safe areas to park money...
Which proves your opinion isn't worth much, since the Chinese are already doing it. Facts don't seem to effect your world outlook do they?
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.
Forum Rules:
The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.
Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.
Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.
This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.
Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ
Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy