By Walter Kurtz, Sober Look
China’s “property bubble” is alive and well. Even as new home prices in Shanghai declined 5.7% last week, home sales have spiked. Property developers’ margins are certainly high enough so that they can offer discounts in order to increase volumes.
Shanghai Daily: Over the last seven days the sales of new homes, excluding government-funded affordable housing, surged 68.3 percent from the previous week to 140,400 square meters, according to a report by Shanghai Deovolente Realty Co.
A rumor has been widely circulated recently that the authorities will permit people who do not have a permanent residence but have lived in the city for three years to purchase a second property. Many non-residents went shopping.
Property Wire: China's financial centre Shanghai has eased home purchase restrictions to allow a broader pool of buyers to purchase a second property.
The city has decided to allow residence permit holders who have lived in the city for at least three years to buy a second home, according to a source at the city's housing regulator.
It previously limited the second home option to locals, or those born in the city or who worked for an extended period of time and were officially recognised as locals, without specifying guidelines for non locals.
But today it seems the authorities have either denied or backed away from this policy. This is quite telling, as it may indicate the central government’s concern about a renewal of the property bubble. With signs of property markets heating up again, the policy my now be shifting away from easing existing curbs on home purchases. Liquidity remains high, while investment opportunities outside of the property markets are quite limited, particularly given current inflation levels. Many who “missed the bottom” in 2008 are now looking to buy in fear of missing the “bottom” again. Even the Beijing market is picking up.
China Daily: According to industry watchers, the property market has been warming up. Property sales in Beijing and Shanghai, for instance, both rebounded last week.In Beijing, 2,186 new and second-hand apartments were sold last week, up 30.2 percent week-on-week, according to the municipal government.
Unbelieveable, yet another bubble that gets quickly reflated, just after its first signs of popping…Extend and pretend is getting better by the day!
Who once said: if we only need to print money to create wealth, we would all be rich by now. I guess it was Milton Friedman and looks like China is proving him wrong!
Just take a bunch of Chinese farmers, put them some suits on and give them a fat government loan and you just raised GDP by 10%. Repeat the operation until no farmers are left. The only guys who really make money in all this are the real estate agents. Somehow that sounds familiar"¦ damn those chinese guys really copy everything we westerners do!
I get so tired of people warning about bubbles. The stock market can only go straight up and central bankers can solve any problem and make markets surge without any long-term consequences.
When are you all going to join the blindly chorus?
Analysis above is extremely simplistic and short on data to say the least. Anyone who has done any serious studying on the china property bubble is aware of the complexities and the fact the imbalances cannot be wiped out by simple policy fine-tuning Such as expanding the base o people eligible to enter the slaughter house. People aren’t that naive.
© 2009 pragcap.com · Register for PC
By Walter Kurtz, Sober Look
China’s “property bubble” is alive and well. Even as new home prices in Shanghai declined 5.7% last week, home sales have spiked. Property developers’ margins are certainly high enough so that they can offer discounts in order to increase volumes.
Shanghai Daily: Over the last seven days the sales of new homes, excluding government-funded affordable housing, surged 68.3 percent from the previous week to 140,400 square meters, according to a report by Shanghai Deovolente Realty Co.
A rumor has been widely circulated recently that the authorities will permit people who do not have a permanent residence but have lived in the city for three years to purchase a second property. Many non-residents went shopping.
Property Wire: China's financial centre Shanghai has eased home purchase restrictions to allow a broader pool of buyers to purchase a second property.
The city has decided to allow residence permit holders who have lived in the city for at least three years to buy a second home, according to a source at the city's housing regulator.
It previously limited the second home option to locals, or those born in the city or who worked for an extended period of time and were officially recognised as locals, without specifying guidelines for non locals.
But today it seems the authorities have either denied or backed away from this policy. This is quite telling, as it may indicate the central government’s concern about a renewal of the property bubble. With signs of property markets heating up again, the policy my now be shifting away from easing existing curbs on home purchases. Liquidity remains high, while investment opportunities outside of the property markets are quite limited, particularly given current inflation levels. Many who “missed the bottom” in 2008 are now looking to buy in fear of missing the “bottom” again. Even the Beijing market is picking up.
China Daily: According to industry watchers, the property market has been warming up. Property sales in Beijing and Shanghai, for instance, both rebounded last week.In Beijing, 2,186 new and second-hand apartments were sold last week, up 30.2 percent week-on-week, according to the municipal government.
Unbelieveable, yet another bubble that gets quickly reflated, just after its first signs of popping…Extend and pretend is getting better by the day!
Who once said: if we only need to print money to create wealth, we would all be rich by now. I guess it was Milton Friedman and looks like China is proving him wrong!
Just take a bunch of Chinese farmers, put them some suits on and give them a fat government loan and you just raised GDP by 10%. Repeat the operation until no farmers are left. The only guys who really make money in all this are the real estate agents. Somehow that sounds familiar"¦ damn those chinese guys really copy everything we westerners do!
I get so tired of people warning about bubbles. The stock market can only go straight up and central bankers can solve any problem and make markets surge without any long-term consequences.
When are you all going to join the blindly chorus?
Analysis above is extremely simplistic and short on data to say the least. Anyone who has done any serious studying on the china property bubble is aware of the complexities and the fact the imbalances cannot be wiped out by simple policy fine-tuning Such as expanding the base o people eligible to enter the slaughter house. People aren’t that naive.
© 2009 pragcap.com · Register for PC
By Walter Kurtz, Sober Look
China’s “property bubble” is alive and well. Even as new home prices in Shanghai declined 5.7% last week, home sales have spiked. Property developers’ margins are certainly high enough so that they can offer discounts in order to increase volumes.
Shanghai Daily: Over the last seven days the sales of new homes, excluding government-funded affordable housing, surged 68.3 percent from the previous week to 140,400 square meters, according to a report by Shanghai Deovolente Realty Co.
A rumor has been widely circulated recently that the authorities will permit people who do not have a permanent residence but have lived in the city for three years to purchase a second property. Many non-residents went shopping.
Property Wire: China's financial centre Shanghai has eased home purchase restrictions to allow a broader pool of buyers to purchase a second property.
The city has decided to allow residence permit holders who have lived in the city for at least three years to buy a second home, according to a source at the city's housing regulator.
It previously limited the second home option to locals, or those born in the city or who worked for an extended period of time and were officially recognised as locals, without specifying guidelines for non locals.
But today it seems the authorities have either denied or backed away from this policy. This is quite telling, as it may indicate the central government’s concern about a renewal of the property bubble. With signs of property markets heating up again, the policy my now be shifting away from easing existing curbs on home purchases. Liquidity remains high, while investment opportunities outside of the property markets are quite limited, particularly given current inflation levels. Many who “missed the bottom” in 2008 are now looking to buy in fear of missing the “bottom” again. Even the Beijing market is picking up.
China Daily: According to industry watchers, the property market has been warming up. Property sales in Beijing and Shanghai, for instance, both rebounded last week.In Beijing, 2,186 new and second-hand apartments were sold last week, up 30.2 percent week-on-week, according to the municipal government.
Unbelieveable, yet another bubble that gets quickly reflated, just after its first signs of popping…Extend and pretend is getting better by the day!
Who once said: if we only need to print money to create wealth, we would all be rich by now. I guess it was Milton Friedman and looks like China is proving him wrong!
Just take a bunch of Chinese farmers, put them some suits on and give them a fat government loan and you just raised GDP by 10%. Repeat the operation until no farmers are left. The only guys who really make money in all this are the real estate agents. Somehow that sounds familiar"¦ damn those chinese guys really copy everything we westerners do!
I get so tired of people warning about bubbles. The stock market can only go straight up and central bankers can solve any problem and make markets surge without any long-term consequences.
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