Forbes: China Property Collapse Has Begun

[Runifyouhaveto]

30% price cut in Hangzhou
http://www.forbes.com/sites/gordonchang/2014/04/13/china-property-collapse-has-begun

New homes also face price pressure. Developers in Hangzhou are now offering deep discounts, and investors and owners are noticing. And not just in that city. “It seems that the 30% price cut in Hangzhou really changed the way Chinese people think about real estate,” writes Anne Stevenson-Yang of J Capital Research, “and I doubt there is any turning back from here.” ...........

As state-run China Central Television explained, the problems in Hangzhou, once the world’s largest city, began on February 18. Then, the North Sea Park development began offering deep discounts. Rumors that the developer had cash problems started a chain reaction across the city. It did not matter that North Sea Park issued denials. Other developers began offering either deep discounts or large incentives, but the tactics did not work. By then, there were almost no buyers

 

[virus]

it has long began... coastal areas have fallen by 10%, inner region 30-40%. not news at all.

if you are interested in tiong land econ, google for andy xie former economist who ran off after scathing attack on boot lickers of Pinkie.

he is a real talent.

 

[The_Hypocrite]

Where have I heard tat b4? What about the important cities like Beijing n Shanghai? If its those ulu cities than price drop is not a big deal as they r more sensitive to price movements.

 

[virus]

http://www.midasletter.com/2014/04/chinas-lehman-moment/

1. In the New York Times, Yasheng Huang, a professor of management at MIT, and author of “Capitalism with Chinese Characteristics” states that China is probably not in danger of a Lehman Brothers style cascading failure to remain solvent, thanks most to the fact the banks are state-owned. That means they “carry the strong implicit guarantees from the government and that they are not under pressure to mark their asset values to market on a real-time basis.

He does, however, go on to suggest that the idea that “China could also grow merrily as if all the ghost cities and bridges to nowhere had no consequences” is not tenable, and warns of impending consequences from the huge amounts of bad debt about to unravel.

2. In the Washington Post, David Ignatius writes “the China Index Academy noted that real estate sales during the first quarter of this year in China’s four biggest cities were more than 40 percent below the levels of a year ago.”

3. CNN reports that there is “no denying the slowing trend — China recorded GDP growth of 7.7% in the last two years, versus 9.3% in 2011 and 10.5% in 2010.”

4. In the Japan Times, former Morgan Stanley economist Andy Xie is predicting a “collapse in China’s property and stock markets”. “It’s going to be big, it’s going to be historic, and probably going to be this year,” said Gordon Chang, a Chinese-American lawyer and columnist who has been predicting a crash in China for the past 15 years or so.”

5. Bloomberg BusinessWeek reported in mid-March on the collapse of major real estate developer Zhejiang Xingrun Real Estate Co. According to the story, Government officials familiar with the matter said yesterday that closely-held Zhejiang Xingrun Real Estate Co. doesn’t have enough cash to repay 3.5 billion yuan ($566 million) of debt. The housing market in the world’s second-biggest economy is cooling with the value of home sales falling 5 percent in the first two months of the year after local governments stepped up measures to curb rising prices.”

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in fact if you look at marc faber and jim rogers, they have ward off proposal to invest in the far east and emerging market for this year.

 

[Runifyouhaveto]

http://www.midasletter.com/2014/04/chinas-lehman-moment/

1. In the New York Times, Yasheng Huang, a professor of management at MIT, and author of “Capitalism with Chinese Characteristics” states that China is probably not in danger of a Lehman Brothers style cascading failure to remain solvent, thanks most to the fact the banks are state-owned. That means they “carry the strong implicit guarantees from the government and that they are not under pressure to mark their asset values to market on a real-time basis.

He does, however, go on to suggest that the idea that “China could also grow merrily as if all the ghost cities and bridges to nowhere had no consequences” is not tenable, and warns of impending consequences from the huge amounts of bad debt about to unravel.

2. In the Washington Post, David Ignatius writes “the China Index Academy noted that real estate sales during the first quarter of this year in China’s four biggest cities were more than 40 percent below the levels of a year ago.”

3. CNN reports that there is “no denying the slowing trend — China recorded GDP growth of 7.7% in the last two years, versus 9.3% in 2011 and 10.5% in 2010.”

4. In the Japan Times, former Morgan Stanley economist Andy Xie is predicting a “collapse in China’s property and stock markets”. “It’s going to be big, it’s going to be historic, and probably going to be this year,” said Gordon Chang, a Chinese-American lawyer and columnist who has been predicting a crash in China for the past 15 years or so.”

5. Bloomberg BusinessWeek reported in mid-March on the collapse of major real estate developer Zhejiang Xingrun Real Estate Co. According to the story, Government officials familiar with the matter said yesterday that closely-held Zhejiang Xingrun Real Estate Co. doesn’t have enough cash to repay 3.5 billion yuan ($566 million) of debt. The housing market in the world’s second-biggest economy is cooling with the value of home sales falling 5 percent in the first two months of the year after local governments stepped up measures to curb rising prices.”

----

in fact if you look at marc faber and jim rogers, they have ward off proposal to invest in the far east and emerging market for this year.

yes, china is sitting on US$20 trillion of debts.

 

[borom]

“Irrational exuberance” at work.

Greed is of course the main reason (fear on losing out-like in sillipore) but many buy properties because its the easy way out.

Compare to other investments like shares where you have to understand economics, industries, financial statements, and charts and actively do stock picking and manage them-buying property is a no brainer. Just pay for the option ,get the loan and presto you can sit back while the goose lays golden eggs.

 

[laksaboy]

I think Temasek has invested a lot in China... those of you hoping to get your CPF money, you should probably give up now.

Like in the movie Shawshank Redemption: "Hope can drive a man insane."

 

[palden]

I think Temasek has invested a lot in China... those of you hoping to get your CPF money, you should probably give up now.

Like in the movie Shawshank Redemption: "Hope can drive a man insane."

Given up long long ago.

 

[frenchbriefs]

If China property collapse does it mean all these bloody tiongs will go home and sinkies and Aussie land property collapse too?

 

[The_Hypocrite]

That is the way investment should be. N tat is y property in good areas will always go up..everyone needs a place to stay.

“Irrational exuberance” at work.

Greed is of course the main reason (fear on losing out-like in sillipore) but many buy properties because its the easy way out.

Compare to other investments like shares where you have to understand economics, industries, financial statements, and charts and actively do stock picking and manage them-buying property is a no brainer. Just pay for the option ,get the loan and presto you can sit back while the goose lays golden eggs.

 

[JHolmesJr]

Given up long long ago.

Dont give up...give up your passport and fook offf with your money. They have to pay you.