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China property bubble set to burst. Australia to pop too.
Topic Started: 14 Mar 2013, 03:13 PM (20,507 Views)
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Chinese house prices continue to rise in August

18 September 2013

China property prices continued to rise in August, despite government efforts to cool the market.

Prices for new homes rose in 69 of 70 major cities. It is the fourth month in a row prices have risen in all but one of China's biggest cities.

China has been trying to rein in property prices amid fears that asset bubbles may be forming in the country.

Analysts said the continued price rises could prompt authorities to take steps to reduce speculation in the market.

Zhang Zhiwei, an economist with Japanese bank Nomura, said that he expected the government to start "tightening monetary and property sector policies after the Communist Party meeting in November".

Chinese authorities have already implemented measures, such as higher transaction taxes and down payments, to try to cool demand for real estate.

However, property remains a popular choice among Chinese investors, and their purchases have continued to push prices up.

According to data from China's National Bureau of Statistics, new home prices in the capital Beijing rose 14.9% in August from a year earlier, while Shanghai's prices were up 15.4%.

Mr Zhang said China's new leadership, which took office in March, appeared to have tolerated rising property prices because of concerns about the strength of the economy.

About 25% of overall investment in China goes towards property, making it one of the country's most important growth sectors.

"Now that economic growth has rebounded and looks set to achieve the 7.5% target for 2013, we believe the government's priority may shift toward containing financial risks and property prices," Mr Zhang said.

Read more: http://www.bbc.co.uk/news/business-24140332
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China October home prices rise 9.6 pct y/y

BEIJING Sun Nov 17, 2013 8:38pm EST

Nov 18 (Reuters) - Average new home prices in China's 70 major cities in October rose 9.6 percent from a year earlier, a fresh record growth rate, according to Reuters calculations based on official data published on Monday, marking the tenth straight month of year-on-year increases.

In month-on-month terms, prices rose 0.6 percent in October, easing from September's gains of 0.7 percent.

The National Bureau of Statistics said new home prices in Beijing rose 16.4 percent in October from a year earlier, compared with September's year-on-year increase of 16 percent.

Shanghai prices were up 17.8 percent in October from a year ago, versus 17 percent annual growth in September.

The rises in both cities were the strongest since the data series began in 2011.

China still faces record home prices despite government measures to calm the market in large part due to a strong view that property remains one of the best investment options and also to local government land sales for much-needed revenues.

Reuters started its weighted China home price index in January 2011 when the NBS stopped providing nationwide data, only giving home price changes in each of 70 major cities. (Reporting By Xiaoyi Shao and Jonathan Standing)

Read more: http://www.reuters.com/article/2013/11/18/china-property-prices-idUSEMS06007420131118
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Property prices in China cities grow at 20% for December

January 20, 2014 - 9:00AM
Bonnie Cao

China’s new home sales last year are likely to have exceeded $US1 trillion for the first time as property prices in cities the government considers ‘first tier’ surged.

China Real Estate Information Corp, or CRIC, and Centaline Property Agency both forecast that National Bureau of Statistics numbers to be released today will show 2013 sales topped $US1 trillion. The value was 5.9 trillion yuan ($US975 billion) in the first 11 months.

New-home prices in December climbed 20 per cent in Guangzhou and Shenzhen from a year earlier, and jumped 18 per cent in Shanghai and 16 per cent in Beijing, the bureau of statistics said January 18.

Premier Li Keqiang hasn’t imposed additional nationwide measures to cool the market since his predecessor Wen Jiabao stepped up a three-year campaign in March, ordering higher down payments and interest rates for second-home loans in cities with “excessive fast” price gains. Instead, Li has left it up to individual cities to impose their own curbs, with at least 10, many of them provincial capitals, tightening local property policies since November.

“The effect of those measures was limited last year because in first-tier cities demand still outpaced supply,” Ding Shuang, a Hong Kong-based senior China economist with Citigroup said in a phone interview.

Shenzhen, Shanghai and Guangzhou have all raised minimum down payments for second homes to 70 per cent since November.

The value of new housing sales in the January-November period last year surged 31 per cent from the same period a year earlier. It was 5.4 trillion yuan in 2012, an 11 per cent gain from the previous year, according to the government data.

Existing-home prices rose 20 per cent in the capital Beijing last month from a year earlier and increased 14 per cent in Shanghai, according to the January 18 data.

Private figures also showed no sign of cooling in the property market. Home prices in December had the biggest year-on-year gain in 2013, increasing 12 per cent, according to SouFun, the nation’s biggest real estate website owner.

Read more: http://www.smh.com.au/business/china/property-prices-in-china-cities-grow-at-20-for-december-20140120-313dq.html
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miw
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People here are getting very nervous. I expect Beijing will have some kind of correction this year. At least one of my friends is thinking of selling his place to avoid a crash.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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Veritas
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miw
20 Jan 2014, 01:48 PM
People here are getting very nervous. I expect Beijing will have some kind of correction this year. At least one of my friends is thinking of selling his place to avoid a crash.
Any talk of "soft landings"?
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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Massive
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anecdotal conversations around town in shanghai sees complete confidence in the value of inner - city dwellings ...

still going nuts..

Just had a colleague take a morning off to get his ticket in line for new apartment compound sale. ( Which apparently sold like crazy) .. They often don't plan a sale date, just call all interested buyers the morning the sales office opens and there's a stampede to the site office to get in line and make a purchase that morning.

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miw
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Veritas
20 Jan 2014, 02:45 PM
Any talk of "soft landings"?
This has little to do with the Chinese economy. It has to do with confidence in BJ real estate prices which have gone nuts the last 3 years. Some people are looking to take some money off the table and move it into other opportunities. One of the opportunities that seems to be opening up is trust company investments in government infrastructure projects. Local and provincial governments are being blocked from borrowing from banks and are turning to private finance.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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Veritas
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miw
20 Jan 2014, 03:01 PM
This has little to do with the Chinese economy. It has to do with confidence in BJ real estate prices which have gone nuts the last 3 years. Some people are looking to take some money off the table and move it into other opportunities. One of the opportunities that seems to be opening up is trust company investments in government infrastructure projects. Local and provincial governments are being blocked from borrowing from banks and are turning to private finance.
Yeah, I know.

Of course its when people start taking money off the table that crashes begin.

Seas of for sale signs as spooked investors rush for the door.

Then people learn just how illiquid an asset housing really is.

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Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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miw
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Massive
20 Jan 2014, 02:55 PM
anecdotal conversations around town in shanghai sees complete confidence in the value of inner - city dwellings ...

still going nuts..

Just had a colleague take a morning off to get his ticket in line for new apartment compound sale. ( Which apparently sold like crazy) .. They often don't plan a sale date, just call all interested buyers the morning the sales office opens and there's a stampede to the site office to get in line and make a purchase that morning.

Yeah. I wouldn't be too worried about well-located stuff in Beijing either. I'd be more worried if I had something high-end outside the 5th ring though. There is added worry for Beijing which is a lot of people moving out because of the pollution issues. Some of them are going to Shanghai which historically has been much better. This winter has been a lot better than last winter so far, so maybe that will stop.

The headhunters are pretty desperate to get people to take positions in Beijing lately. People with kids just won't move here.

Veritas
20 Jan 2014, 03:04 PM
Yeah, I know.

Of course its when people start taking money off the table that crashes begin.

Seas of for sale signs as spooked investors rush for the door.

Then people learn just how illiquid an asset housing really is.
And your point is? Real estate corrects every few years. Unless you actually own it, it doesn't really matter that much.

Even if you own it, it doesn't matter all that much unless you are trying to trade in real estate.
Edited by miw, 20 Jan 2014, 03:17 PM.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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Count du Monet
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Veritas
20 Jan 2014, 02:45 PM
Any talk of "soft landings"?
Looking for Goldilocks. You can walk a pathway between the two extremes of inflation and deflation. A good Goldilocks is wide safe pathway.

The problem with modern monetary cures for recessions is cure can create a situation where that middle pathway becomes a razor edge and one will lunge violently into either inflation or deflation.

The problems with landings is how fast and heavy you are coming down. So the problem for the Chinese central bank is coming down from what so far has been a highly inflationary policy. The problem is coming down from this might mean hitting the run way so hard you crash into a powerful deflationary scenario because of the towering ratios of credit. So Goldilocks is a nice landing between the two extremes of overshooting the runway and crashing and burning on the runway.
Edited by Count du Monet, 20 Jan 2014, 03:38 PM.
The next trick of our glorious banks will be to charge us a fee for using net bank!!!
You are no longer customer, you are property!!!

Don't be SAUCY with me Bernaisse
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