China's real estate bubble - yes or no?

[data_editors]

HONG KONG (MarketWatch) — New data showed a sharp slowdown in China’s housing market, with prices generally flat or lower, and with one financial broker citing a government report that no new homes were sold in Beijing during the recent weeklong Lunar New Year holiday.

The news item gives me the shivers. After Japan, Dubai, Spain, Ireland, and the USA, is China the new real estate bubble?

 

[Bandiit]

HONG KONG (MarketWatch) — New data showed a sharp slowdown in China’s housing market, with prices generally flat or lower, and with one financial broker citing a government report that no new homes were sold in Beijing during the recent weeklong Lunar New Year holiday.

The news item gives me the shivers. After Japan, Dubai, Spain, Ireland, and the USA, is China the new real estate bubble?

Had few days ago discussion with some local China guys and they all were agreed about getting a loan and 30% that you need to pay from apartment prize is very expencive today in China.

As I undestand China govement raised the minimum payment for real estate form 10% to 30% to avoid real estate overheating. I think it was done one or two years ago already. And yes everywhere you go in China you can see new houses built. Very different picture from EU today.

PS. My best guess is that bubble can not be forecasted as it then it is not a real bubble.



-cheers

 

[hgh]

looks under control. but still have risk here. now government only allow people to buy one flat if they don't have. those who have 2 or more aren't able to buy more.
To expensive to the those poor guys.

 

[neil]

looks under control. but still have risk here. now government only allow people to buy one flat if they don't have. those who have 2 or more aren't able to buy more.
To expensive to the those poor guys.

Are you building up posts for some scam attempt ?
In any event stop using Google Translate it garbles your message and strangulates your verbs

 

[london88]

Whether or not there is a bubble is still being debated. The situation here is very different to what the news actually reports. Yes the government is being cautious and try to rein in property prices and remove speculation from the market but this does not end with the property buyers.

Efforts are being made to rein in rampant development (often unfunded through supply chain financing) and illegal developments (housing with no government approval). Land prices are the first cause of high property prices, actual development costs per square meter are not that high and have not increases anywhere near the rate of asset appreciation! Other measures are also being taken. The government has provisions amounting to billions of dollars for low cost housing projects across the country to try and relieve the pressure further down the wealth chain, tighter approval processes and government / private initiatives.

The rate of property price appreciation will definitely slow down but will not stop as the rate of urbanization is still increasing. What is more of a concern is the situation in Europe as this has a knock on effect for people's salaries. Negative equity is unlikely but could be become a factor even without a decrease in prices due to the way in which assets are valued for mortgage purposes.

 

[london88]

Damn thing won't le me edit, "significant decrease in prices"

 

[hgh]

Are you building up posts for some scam attempt ?
In any event stop using Google Translate it garbles your message and strangulates your verbs

Sorry for my poor english Will try best to improve it .Btw,I never use Google Translate.

 

[hgh]

Are you building up posts for some scam attempt ?
In any event stop using Google Translate it garbles your message and strangulates your verbs

PS: No scam attempt, I won't ask you to buy anything, all the things I said are the truth. You can google it...Of course, if this bother you and others, sorry for this. Will take care of it.

 

[hgh]

Ok. Let's back to this post, now China faced the issue of Urbanization. More and more farmers will join into the city. This means they still lack of the houses to live. On the other hand, these people are very poor, they don't have money to buy the houses...this leads to the a lot of society issues.

 

[london88]

Ok. Let's back to this post, now China faced the issue of Urbanization. More and more farmers will join into the city. This means they still lack of the houses to live. On the other hand, these people are very poor, they don't have money to buy the houses...this leads to the a lot of society issues.

Hgh where are you based, I am in Beijing.