I just read an article about China's real estate market, even the contractor now believe new house's price is gona to drop 20% this year. SO, don't buy, just let the market crash, you never know, it might drop 50-60% since no one has confidence in China's RMB, people just want to hold US Dollars and buy US dollars at 1 USD == 13 RMB rate.

Reference Hibbert?

hlbb wrote:I just read an article about China's real estate market, even the contractor now believe new house's price is gona to drop 20% this year. SO, don't buy, just let the market crash, you never know, it might drop 50-60% since no one has confidence in China's RMB, people just want to hold US Dollars and buy US dollars at 1 USD == 13 RMB rate.

I'll remove my left testicle if this happens....

rocco72 wrote:

hlbb wrote:I just read an article about China's real estate market, even the contractor now believe new house's price is gona to drop 20% this year. SO, don't buy, just let the market crash, you never know, it might drop 50-60% since no one has confidence in China's RMB, people just want to hold US Dollars and buy US dollars at 1 USD == 13 RMB rate.

I'll remove my left testicle if this happens....

Just wait and see,
RMB== Restriction
USD== Freedom,
and everyone loves Freedom and hate Restriction, don't you agree.

April 1st came earlier this year, i guess

hlbb wrote:I just read an article about China's real estate market, even the contractor now believe new house's price is gona to drop 20% this year. SO, don't buy, just let the market crash, you never know, it might drop 50-60% since no one has confidence in China's RMB, people just want to hold US Dollars and buy US dollars at 1 USD == 13 RMB rate.

thank you.
I will sell my property today and buy two when the market crashes.

It's a bubble, it's bound to pop sooner or later!

It will crash, there is simply too much built and continuing to be built, some predict it will affect the wider economy and will happen within the next 5 years. I suspect it will affect certain types of property in certain parts of town, like new built villas (plenty standing empty already) and shoe box high rise apartments. Top end stuff in the centre of town (any city) rarely crashes like the rest of the market.

For a "bubble" to happen, there needs to be credit, and most of these properties are paid in full.
Yes there has been inflation in the housing prices, which will probably go down with Beijing determined to combat rising interest rates.
There will be a correction, no one knows if it will be 5% or 40%, but regardless China's economy is still on track to become the largest in the world, it just recently surpassed Japan, making it the 2nd largest in the world (admittedly its still 2/3's away from the US).

hlbb wrote:no one has confidence in China's RMB, people just want to hold US Dollars and buy US dollars at 1 USD == 13 RMB rate.

hahahahahaha, just can't stop laughing, hahahahahaha! Were you one of Bush's economic advisers by any chance??? Chinese RMB is the only thing keeping US currency valued at 7rmb to 1USD. If China wasn't propping up the US and keeping it's own currency artificially low, the reverse would be true, 7usd to 1rmb!

As for housing prices, they still climbed last month, although the sale rates are now 80% lower than a year ago. Supposedly this is due to the new home owner tax, which so far has only applied to 1300 homes in Shanghai...

rafaelcomporta wrote:For a "bubble" to happen, there needs to be credit,

That's not necessarily so. Inflated property prices are caused by more demand than supply. Crashes are caused when this situation is reversed. The situation will be reversed not due to a flood of repossession but due to over capacity. I believe something like 60% of China's GDP is construction. Simply unsustainable.

rafaelcomporta wrote:There will be a correction, no one knows if it will be 5% or 40%,

5% is a correction. 40% is a crash. 40% + is already happening outside of Beijing and Shanghai.

ShugaPush wrote:

rafaelcomporta wrote:For a "bubble" to happen, there needs to be credit,

That's not necessarily so. Inflated property prices are caused by more demand than supply. Crashes are caused when this situation is reversed. The situation will be reversed not due to a flood of repossession but due to over capacity. I believe something like 60% of China's GDP is construction. Simply unsustainable.

rafaelcomporta wrote:

Yes, that is what would create inflation, but I am merely asking you to not be so ignorant of the financial terms, bubbles NEED to involve credit/leverage.

Regarding sustainability, yeah it looks like we can all be ****. There are a few different perspectives on what will happen, some of the brightest traders and investment managers I know all claim that the bottom is here and all things are going up. They are completely blind to the point that the only reason we didn't crash more is because of QE and QE2. If you take that into account, you begin to realize that the fundamentals of our economy are **** up, but who wants to be known as the president who brought around the worst economic crisis in history? I'm not sure what is going to happen, but I can make money off of it either way

China aims to build 10 million units of affordable homes this year, while property developers sold nine million private flats last year.

http://www.thestandard.com.hk/news_deta ... con_type=1

^First, they promise to investors what home price will forever rise. When all the money collected, they begin build affordable homes. Ha-ha. How clever they are. - Suicide rate will rise.

rafaelcomporta wrote:

ShugaPush wrote:

rafaelcomporta wrote:For a "bubble" to happen, there needs to be credit,

That's not necessarily so. Inflated property prices are caused by more demand than supply. Crashes are caused when this situation is reversed. The situation will be reversed not due to a flood of repossession but due to over capacity. I believe something like 60% of China's GDP is construction. Simply unsustainable.

rafaelcomporta wrote:

Yes, that is what would create inflation, but I am merely asking you to not be so ignorant of the financial terms, bubbles NEED to involve credit/leverage.

You might be careful throwing around the term "ignorant" when someone differs with you.

A bubble is defined in retrospect by the size of the decline after it deflates. We can all speculate, but if there's no ultimate price collapse, there's no bubble. If we're talking only about property bubbles, leverage is ubiquitous because the vast majority of property purchases are leveraged to some degree. The presence of leverage doesn't mean that leverage is a required element of allbubbles.

Bubbles can form in asset markets without leverage. All that's required is unjustified optimism about future prices that results in excessive prices which drop precipitously when optimism wanes. But leverage certainly exacerbates bubbles and the speed and magnitude of their collapse.

oh there is a bubble, and I keep hearing since years it will burst.
who is telling me that? some of the "expert" expats told me that
over the course of years. i guess most of them keep forgeting
next to the stock exchange it is the only legal casino where locals
can satisfy their gambling urges. sure it will burst but not
on some western selfproclaimed experts timeline.

LOL!!! Not in Shanghai. The prices in Shanghai are sustainable. It's still 2-3 times cheaper than Taipei and with SHA being the economic hub of Asia, there prices here will catch up one day. It won't drop here, but in other cities in China.

hlbb wrote:I just read an article about China's real estate market, even the contractor now believe new house's price is gona to drop 20% this year. SO, don't buy, just let the market crash, you never know, it might drop 50-60% since no one has confidence in China's RMB, people just want to hold US Dollars and buy US dollars at 1 USD == 13 RMB rate.

China aims to build 10 million units of affordable homes this year, while property developers sold nine million private flats last year.

This will drive a lot of change in the market in the next couple years. Central gov has mandated a pretty significant number of "low cost" units for certain buyer profiles become available in each major city. Its not an idea, the first of these low cost units are suppose to become available in in the next few months and they are suppose to be decent quality ( better quality than investment units that were built 5 years ago). At first the most in need will only qualify ( <5k income, own no other home, cannot resell for x years, for instance). After this group is serviced, it will broaden the criteria and allow more local people into the market. So all these people who bought units for investment and have let them sit, are heading for a highly diluted buyers market. Could be fun!

PureXTC88 wrote:It's a bubble, it's bound to pop sooner or later!

totally agree, it's just a matter of time.

the trick is, China real estate market is quite complicated compared to the rest of the world, I hope
the price will fall gradually, not slump, otherwise, economy will slump as well.

by the way, isn't that the US government who force the RMB to appreciate?

From my 10 years observation of real estate market in China i can say...

It was nice Invest Game (call it Chinapoly), when Government continually rise land price (in one hand) and promise to investors solid yearly return from money invested in homes (in other hand). They used massive propaganda for install the minds "Home-is-Wealth" , "Home-is-Marriage" in people heads. And, i would say, 10 years of the Game was very successful. Finally, loads of folk's money gone back to "Father-Government" and partially to the "Sons" accounts

But Awful Doom Day come. Middle East's "un-hormony events" clearly showed what every game may have painful finish. So, The Course was changed, They will flood the market by cheap houses for plebes. Investors interests was damned/forgotten - and they will bite own nails. Will see.

Can somebody tell me how much my Shanghai studio should have risen in price since 2008?
If you could provide me with a link for a statistics source where it shows the price change since 2008, I would appreciate...
Thanks in advance

Carlos

The chance of Chinese housing bubble burst in year infinity = 100%
The chance of Chinese housing bubble burst in year 2050 = 99%
The chance of Chinese housing bubble burst in year 2020 = 75%
The chance of Chinese housing bubble burst in year 2015 = 50%
The chance of Chinese housing bubble burst in year 2012 = 10%
The chance of Chinese housing bubble burst in year 2011 = 1%