will a falling stock mkt cause property prices in shanghai to fall?

Not by itself unless there is a knock on effect into the overall economy. In fact there is an arguement that money not invested in the stock market could now be diverted into the property market and help to support property prices. Inflation and interest rates are more important. A rise in interest rates may reduce property prices.

but the wealth generating effect is negative this year. i agree on the economy part and really think that if a recession hits the speculators who are holding 5 over assets would need to sell to raise funds for their business. this morning's all time low fixing is going to add pressure on exporters and already shenzhen have seen falling prices. just dont understand why shanghai is so stubborn

What all time low is it?

spot fixing at 9015

kumlong wrote:will a falling stock mkt cause property prices in shanghai to fall?

If it's significant enough... then yes.
Property sector is usually the last to fall.
The pain has to be severe enough! And public sentiment has to turn to one of relative fear.

kumlong wrote:will a falling stock mkt cause property prices in shanghai to fall?

So many different possible answers. Too bad all one can do is guess, though. If someone had THE correct answer, they'd be another Warren Buffet with no time to post on SHexpat.

u have become more polite lately. what happened?

kumlong wrote:u have become more polite lately. what happened?

Pick one:

a. I'm ill with no energy to be an obnoxious *******; or
b. I don't hate everybody all the time. It's usually context related.

its like the grouch becoming kermit. come on. be yourself.

Let's think like a (rich) retail investor in China:

"I've invested a bunch of money in the stock market and have lost half of it. What do I do?"

I guess the answer depends on whether they think it'll fall further -- if so then they sell and put the money into a bank account or buy real estate?

If not then do they sell real estate and invest more to benefit from any eventual rise? This option seems unlikely.

underh20 wrote:

kumlong wrote:u have become more polite lately. what happened?

Pick one:

a. I'm ill with no energy to be an obnoxious *******; or
b. I don't hate everybody all the time. It's usually context related.

Come on underho! Hate hate hate. Fight fight fight.

YariGuy wrote:Let's think like a (rich) retail investor in China:

"I've invested a bunch of money in the stock market and have lost half of it. What do I do?"

I guess the answer depends on whether they think it'll fall further -- if so then they sell and put the money into a bank account or buy real estate?

If not then do they sell real estate and invest more to benefit from any eventual rise? This option seems unlikely.

I don't think we can say that your average real estate speculator is a rich retail investor.

There are very few of my Chinese colleagues who haven't bought investment properties and even I saw the logic in doing so. I think most with investment properties are your typical Chinese person with an above average income.

hc wrote:

underh20 wrote:

kumlong wrote:u have become more polite lately. what happened?

Pick one:

a. I'm ill with no energy to be an obnoxious *******; or
b. I don't hate everybody all the time. It's usually context related.

Come on underho! Hate hate hate. Fight fight fight.

Saving a little energy for an upcoming battle with He Who Shall Not Be Named (aka Mr. Nonce).

wenzhou trash i would say

kumlong wrote:wenzhou trash i would say

?????

i mean most of the speculators would be your wenzhou nin.

actually to argue that u can invest in property when stocks fall is assuming that property is a liquid asset. i think even in shanghai's case liqduity in the secondary mkt is bad and it will take time to sell should you need to raise cash to reinvest

Don't you think it depends on the type of property you have? Sure if you buy very expensive luxury apartments, it might take quite some time to shift, but the cheaper stuff I suspect moves much faster.

i think the other way around unless u want to stop out at major discount. say u buy a walk up apartment. and u try to sell. my personal believe is demand will be greater for a brand new place rather than the old one. for luxury projects i think supply is scarce and thus there will be more demand. i may be wrong tho

I think the fact that worldwide the real estate market in general is falling and that a lot of the money holding up shanghai is outside/overseas money I think it is bound to fall since the world is in general all going same direction more or less (unless the country has alot of oil/gas). Also I think the rental monthly price vs purchase price is crazy and not feasible on a return on investment basis vs at least the USA. The only thing maybe positive for the China/Shanghai market is that the Yuan still might be undervalued vs the dollar.

John

agree. the interesting thing is that morgan stanley and citibank have started taking profits on their shanghai investment.

In my local town around 50% of the property is bought for speculation purposes and 2 years after buying, the apartments are still concrete shells lying empty. I guess it works in a rapidly continually increasing market.

Hold on tight to your dreams.

Would be great fun though if properties bought by speculative buyers start dropping. Especially if heavy financed, this could be a double blow to property prices, which can then finally go back closer to their non-inflated value. That value is way below current, as over half of so-called 'luxury' apartments are built with crap materials, crap crap plumbing, crap insulation and no proper heating.

kumlong wrote:i mean most of the speculators would be your wenzhou nin.

actually to argue that u can invest in property when stocks fall is assuming that property is a liquid asset. i think even in shanghai's case liqduity in the secondary mkt is bad and it will take time to sell should you need to raise cash to reinvest

Difficult to say. Just about everybody I have talked to that works for me has at least one investment property -- that's Shanghai people in Shanghai, Beijing people in Beijing and Guangzhou people in Guangzhou. It seems that of all the real estate investment, far more is through your average Zhang buying an additional property or two to suppplement their retirement income that overseas investors.

Most that I know rent out their extra apartments and talk about how that extra several thousand per month will supplement a very unsecure pension scheme.

edbreejen wrote:Would be great fun though if properties bought by speculative buyers start dropping. Especially if heavy financed, this could be a double blow to property prices, which can then finally go back closer to their non-inflated value. That value is way below current, as over half of so-called 'luxury' apartments are built with crap materials, crap crap plumbing, crap insulation and no proper heating.

I don't see how property praices for average units can go down a heck of a lot. I mean, there are 1.4+ billion people here and they all want to live and work in the city. Space is finite. The population count is not.

underh20 wrote:
Difficult to say. Just about everybody I have talked to that works for me has at least one investment property -- that's Shanghai people in Shanghai, Beijing people in Beijing and Guangzhou people in Guangzhou. It seems that of all the real estate investment, far more is through your average Zhang buying an additional property or two to suppplement their retirement income that overseas investors.

Most that I know rent out their extra apartments and talk about how that extra several thousand per month will supplement a very unsecure pension scheme.

Very similar to what a lot of people have done in the UK. The next few years are going to be interesting, watching people's "pensions" crumble to dust.

Fully agree on average units, though not on the luxury segment where empty concrete shells already form 1/3 of all units in some downtown areas.

crivens200 wrote:

underh20 wrote:
Difficult to say. Just about everybody I have talked to that works for me has at least one investment property -- that's Shanghai people in Shanghai, Beijing people in Beijing and Guangzhou people in Guangzhou. It seems that of all the real estate investment, far more is through your average Zhang buying an additional property or two to suppplement their retirement income that overseas investors.

Most that I know rent out their extra apartments and talk about how that extra several thousand per month will supplement a very unsecure pension scheme.

Very similar to what a lot of people have done in the UK. The next few years are going to be interesting, watching people's "pensions" crumble to dust.

Yeah, we're going to have to see how things play out. With the stock market not performing and mutual funds tanked, I don't see people putting their money anyplace but real estate for the moment.

Right now liquidity on upper middle class units is pretty good. I've gotten rid of places in Guangzhou, Shanghai and also Beijing quite easily -- in under a month since putting them on the market and at decent prices. A lot depends, I believe, on incidental things like proximity to good schools and one's employer.

crivens200 wrote:Fully agree on average units, though not on the luxury segment where empty concrete shells already form 1/3 of all units in some downtown areas.

I think that, in general, you're right. Again, proximity to good schools and one's employer is a big plus. Still, I wouldn't invest in a luxury unit, but I would buy one to live in -- perhaps. One problem, though, is for the extra money you'd think the quality would be better. Well, think again.