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Q: Is this the beginning of the housing bubble or a bump in the road?

http://finance.yahoo.com/news/china-falling-real-estate-prices-050802014...

 

losing 25 percent on a house in 5 days, ouch!!!!!

5 years 12 weeks ago in  Business & Jobs - China

 
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'Till you don't sell, you didn't loose anything!'angel

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5 years 12 weeks ago
 
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Looks like it's started. All it takes it one big player to start the ball rolling. The rest will follow. In China, with the market so fragmented, I'm not sure it will filter down to all cities but the big cities, boy, get ready for bargain basement prices! Let's hope this keeps up, then I shall be ready to pick up some bargains here. 

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5 years 12 weeks ago
 
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Geez this topic, I never know where to start. There is such a huge difference between a tier one/two city and a ghost town that I'm not even sure if we could talk about just one bubble. Like Louis, I think it's going fragmented.

 

My uneducated guess would be a quick bump before the real dive, because people knew for a while prices were stagnating and waiting to go down, so they've be waiting and now it really went down they might feel the bargains they've been waiting for are finally here, hence a quick breathe before the fall.

 

But I'm no professional, honestly taking every influential criteria into account, such as the Chinese society specifications, profile of potential buyers, actual quality/location of properties per city per district, laws and such is just maddening.

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5 years 12 weeks ago
 
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If something drops 25% in 5 days, surely the seller has made too much/the buyer is an idiot buying face rather than buying value. 

 

There must be some face to be gained in loosing a lot. 

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5 years 12 weeks ago
 
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from what I hear, the bubble has already burst at least in a way. Prices haven't gone up in a while and are kept high with price floors, at least in some markets. So nothing is selling, and the developers are forbidden from seeking a new equilibrium to unload their inventory. That's a good short term way to prevent a mass panic but long run that's going to make any correction much much worse. It's why it's a good idea to keep politics out of the market, though a certain degree of oversight is wise to prevent fraud.

 

There just hasn't been that kind of cascade failure yet, where everybody panics and tries to sell at once. 

 

Look at these assholes protesting like they never thought a speculative investment might go south! I mean what do they want? That's the market, the developer might have to unload those units if they want to stay in business. Do they want to wait and see what they get from the liquidator if the whole project goes belly up???

 

 I guess if that's how people are going to react they are wise to keep the story under control, though on principle I hate that.

 

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5 years 12 weeks ago
 
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http://www.zerohedge.com/news/2014-08-26/china-industrial-commodities-co...

 

China Industrial Commodities Collapse As Sentiment Tumbles To 15-Month Lows

 

Lastly, those focused on spot Yuan movements (strength in recent weeks) have suggested this also confirms China strength - inflows - but looking out 12-months (OP=12-months chart) shows the market is expecting a dramatic devaluation from current levels in the Chinese currency is coming.

Weaker steel prices have weighed on iron ore as a slowing Chinese economy and sluggish property sector darkened the outlook for demand. The most-active January rebar contract on the Shanghai Futures Exchange fell to 2,961 yuan a tonne on Monday, its lowest since the exchange launched rebar futures in March 2009.

 

 

And despite recent strength in Spot CNY... the market's forward-looking perspective of the Yuan sees notable devaluation coming...

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http://investorshub.advfn.com/boards/read_msg.aspx?message_id=105680544

 

Interesting article about ending US$ global reserve currency status, which will give you an answer on future of Chinese (and others) economy. Here is the small part, more on IHub web link:

 

In why they are making an enemy of Russia? we looked at two of the key reasons why the US is making an enemy of Russia, namely the promotion of conflict by the powerful Defense industry lobby in order to keep its order books full, and the value of conjuring up an external enemy as a hate figure for the masses, in order to take the heat off the government. In this article we are going to look at what is arguably an even bigger reason, that was largely omitted in the earlier article, which is that Russia, in alliance with China, is threatening to bring an end to the dollar as the global reserve currency, which would mean the end of the American empire. 

We are witness to the greatest struggle of our age – the battle to maintain global dollar hegemony, and with it US economic, military and political dominance of the entire planet – and this struggle is now coming to a head.

Enter Russia (and China), the biggest threat yet to dollar dominance. These large powerful neighbors have entered into various major currency and trade agreements in the recent past that do not involve the dollar, and therefore pose a serious threat to the dollar’s reserve currency status that left unchallenged would bring it to an end. Once you understand that you understand the reason for the recent propaganda blitz against Russia. In addition China has been busy mopping up the global gold supply for several years, as early preparation for the eventual backing of its currency by gold, which will put the final nail in the US’ coffin, as the unbacked dollar will collapse completely when this happens.

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The Nail In The Petrodollar Coffin: Gazprom Begins Accepting Payment For Oil In Ruble, Yuan

Submitted by Tyler Durden on 08/27/2014 - 13:57

According to Russia's RIA Novosti, citing business daily Kommersant, Gazprom Neft has agreed to export 80,000 tons of oil from Novoportovskoye field in the Arctic; it will accept payment in rubles, and will also deliver oil via the Eastern Siberia-Pacific Ocean pipeline (ESPO), accepting payment in Chinese yuan for the transfers. Meaning Russia will export energy to either Europe or China, and receive payment in either Rubles or Yuan, in effect making the two currencies equivalent as far as the Eurasian axis is conerned, but most importantly, transact completely away from the US dollar thus, finally putin'(sic) in action the move for a Petrodollar-free world.

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Interesting blog about global financial wipe-out/rebalancing (China included) coming:

 

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/8/30_St...

 

Eric King:  “David, we saw that mania in 1979 -1980 where gold skyrocketed, silver skyrocketed, is it going to be that kind of ride this time?”

 

Stockman:  “Yes.  That (1979 - 1980 skyrocket in gold) will be recorded in the history books someday as simply the warmup for what is likely to occur.  The central bank regimes that we’ve had for 20 years, and that have infected the whole world, from the BOE (Bank of England), to the BOJ (Bank of Japan), to the ECB (European Central Bank), the Fed, the People’s Bank of China, and the rest of them, when that regime comes apart, when that regime fails, there is going to be a reset in terms of the way people look at financial values.  That’s when we will have another round of flight to gold and other traditional monetary assets (such as silver).” This was just a small portion of what David Stockman had to say in his one of his most extraordinary audio interviews ever.  The audio with Stockman will be available shortly and you can listen to it by CLICKING HERE.

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5 years 11 weeks ago
 
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Chinese Commodity Crash Continues, But Pigs Are Flying

Submitted by Tyler Durden on 09/02/2014 - 13:41

When it comes to keeping track of China's economy, one can listen,and ignore, the official goalseeked and made-up-on-the-fly data released by the government, or one can simply observe the price dynamics of the all-important Chinese commodities sector (because with fixed investment accounting for well over 50% of GDP, the marginal price of the commodities that are used in capital investment tell us all we need to know about the true state of the Chinese economy). It is here where we find that contrary to the recent performance of the Shanghai Composite, which has been trading exclusively on the coattails of the most recent unofficial QE by the PBOC, commodity prices in China are actually crashing across the board, which in turn suggest that the real GDP is most likely anywhere between 20% and 60%, if not more, below the "official" 7.5% GDP print.

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Nobody is buying because the prices are retarded for the average salary in top Tier cities. I did the math and it would be something like 80-90 years to pay off an apartment that MAY last 40-50 years. WTF lol

 

Chinese are just getting smarter when it comes to getting totally screwed over and most are deciding to move back to their hometowns or smaller cities (Tier 3-4) cities closer to their hometowns with houses they can possibly afford. 

 

It is a smarter investment as these cities are getting heavy investment to grow while larger cities have pretty much hit critical mass. 

 

A new speed train just opened up last month in my city and I figure it (along with all the other smaller cities along the way) will grow and develop more nicely due to this change. Especially housing around those stations (which my new house is). 

 

I bought my apartment (about 75% finished) at a much lower rate than they wanted. We played the "give you face if a foreigner owns a place here" card and it worked. The location is about 10-15 minutes away from all train stations and air ports and I figure it will rise in value as it is the new development zone, but who knows. 

 

The market in this city still seems decent, people are still buying and lots of projects still going up. Take my advice, invest in a good 3rd or 4th Tier city, that has some elbow room for your investment to grow. 

 

 

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5 years 11 weeks ago
 
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This has some nice pictures

 

http://www.businessinsider.my/construction-in-chinas-manhattan-halted-20...

 

and links to other articles relevant to the topic

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5 years 10 weeks ago
 
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5 years 9 weeks ago
 
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Where have you been? I couldn't find this thread last night....Here we go:

 

Chinese Growth Slows Most Since Lehman; Capex Worst Since 2001; Electric Output Tumbles To Negative

Submitted by Tyler Durden on 09/13/2014 - 12:35

China may need to expand its goalseek template to include the other far more important measure of Chinese economic activity, such as Industrial production, retail sales, fixed investment, and even more importantly - such key output indicators as Cement, Steel and Electricity, because based on numbers released overnight, the Q2 Chinese recovery is now history (as the credit impulse of the most recent PBOC generosity has faded, something we have discussed in the past), and the economy has ground to the biggest crawl it has experienced since the Lehman crash. What's worse, and what we predicted would happen when we observed the collapse in Chinese commodity prices ten days ago, capex, i.e. fixed investment, grew at the slowest pace  in the 21st century: the number of 16.5% was the lowest since 2001, and suggests that the commodity deflation problem is only going to get worse from here.

 

BuTT:

 

 

The Fed Has A Big Surprise Waiting For YouSubmitted by Tyler Durden on 09/13/2014 - 14:21

The US economy is dead. The Fed has known this for a long time, but pumped it up to where it is now to draw in all the greater fools, the so-called big investors who have made money like honey from QE and ZIRP. They are the greater fools. The American real economy ceased being a consideration long ago. We’re in for big surprises, and they won’t be pretty, they’ll be pretty nasty. There are far too many people who think of themselves as smart who don’t see the difference between a theater play and a reality show. The Fed will raise rates because that will make the biggest banks the most money. There’s nothing else that matters. The Fed can’t revive the US economy, that’s just a foolish notion. But it can suck a lot of wealth out of it.

And warning to all US (or any country) 'longs' stocks holders:

 

Art Cashin: "Things Could Theoretically Turn Into What I Call A Lehman Moment"

Submitted by Tyler Durden on 09/13/2014 - 15:23

Q. What are traders talking about at the present time here at the New York Stock Exchange?

CashinWe are concerned about two questions. First, how will the Fed do in keeping money reasonably easy without causing inflation? Second, where do we stand with the current geopolitical challenges? For now, these challenges seem to be short term concerns. But should we begin to see a financial contagion and pressure building on banks in Europe, perhaps out of the Ukraine situation, things could theoretically turn into what I call a «Lehman moment». That is when markets come under pressure but seem to be under control, and then things change suddenly.

'Lehman moment' occurred in 2007 US stocks market. Only 'relatively safe' exit I see it this time is in 'gold &silver bullion'.

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5 years 9 weeks ago
 
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If so, its been a long time coming.

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5 years 9 weeks ago
 
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I was in the outskirts of Ningbo on last monday and I did see still a lot of construction going on. The buildings already finished were, as often, all empty. I asked my supplier about prices trend in the area: sales drammatically slower than last year even with prices dropped from 10-11K/sqm to 8-9K/sqm y-o-y.

 

 

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5 years 9 weeks ago
 
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I notice in the original story that the 25% cut came from a Shanghai development, and the story said that 25% equalled 300,000RMB, meaning the total price was only 1.2million RMB to start with.

 

Isn't that either incredibly cheap, or very small (or very far away)???

 

If you can't sell apartments in SH for 1.2million, something's really wrong.... The bust is coming (if it isn't here already)

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5 years 9 weeks ago
 
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I can't wait until it crashes so we can get an affordable house for the in-laws...

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5 years 9 weeks ago
 
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An interesting point raised by Scandi. I'm watching the market at the moment as I'm considering buying a place next year. Either in Zhongshan or in Huadu (North of Guangzhou). Both these areas are still advertising new apartments for around 5-6k rmb/sq.metre.

 

My big concern with buying something new at the moment would be occupancy rates. I have one friend who lives in a very nice garden in Zhongshan where the 1st phase is heavily occupied but the tower blocks behind his place look to be less than 10% occupied.

 

Say I but a nice new place in a big sized gardens and only 10% of the apartments are occupied then the management company would only get 10% of the possible total monthly management fees from owners/tenants. In that case they'd cut corners to reduce costs. I'd also find then that there would be less shops renting the 1st floor outside spaces.

 

I'd be more tempted to look at buying 2nd hand, something between 5-10 years old. In that way I'd be able to visit at day and night to check on occupancy rates and also check out the local services/shops in an area that has already developed. I'd also then be able to have a look at how the structure of the buildings have stayed and check out the maintenance levels of the communal areas.

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5 years 9 weeks ago
 
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