KalanStar wrote:^^I see the same thing. I have friends that own 3 and 4 homes, but only finish th interior of one. Who's buying the new homes, the people who have already bought 2 or 3. Their salaries alone likely do not finance such expenditures, rather it is the increase in collateral provided by the houses they own increasing in value at +5% per month. If the market stagatets, they'll be forced to default on the majority of their 'investments' leading from saturation to a glut in the housing market. This is the end of the bubble market. It'll inevitably happen, don't worry!

In 2001, 3 story luxury homes were selling for a mere 300 000 rmb! Same location, same house today is "worth" 3 million... but to me it isn't! It's 9 years old... so I'd only pay 225 000 rmb! That's it's true value, probably less since at that time there was only 8 houses like that in the area, now there's hundreds if not thousands!

KalanStar wrote: In 2001, 3 story luxury homes were selling for a mere 300 000 rmb! Same location, same house today is "worth" 3 million... but to me it isn't! It's 9 years old... so I'd only pay 225 000 rmb! That's it's true value, probably less since at that time there was only 8 houses like that in the area, now there's hundreds if not thousands!

In China, however, “flipping” is not the problem. Some people may be engaged in short-term ”flipping,” but as I’ve described in my FEER article “China’s Real Estate Riddle,” a lot more are buying residences — in many cases multiple units — and holding them vacant indefinitely as an unproductive ”store of value,” like gold. As I mentioned in my article, the Financial Times estimates that there are 587 million meters of apartment space that buyers have purchased over the past five years only to leave lying empty (for a concrete notion of what this statistic means, take a look at Al Jazeera’s report on Ordos). This puzzling phenomemon is due to the fact that Chinese citizens have relatively few investment options, and China’s real estate sector (unlike its stock market) has never experienced a sustained downturn since the country converted to private home ownership in the mid-1990s. The fact that China has no annual holding tax on property means there is little penalty for letting property lie idle, in the hope that it will appreciate or at least retain its value. The result is an inflated market where the demand for property as a pure investment vehicle far outstrips the demand for affordable, usable space.

If people were trying to “flip” their properties, that might actually be a good thing. At the very least, it would mean those residences would have to be brought onto the secondary market and priced. What we see in China, though, is an extremely weak secondary market. In the U.S., the ratio of secondary to primary residential property transactions for the first half of 2009 was 13.45; in Hong Kong it was 7.25. In China as a whole, that ratio was 0.26 (four times as many new home purchases as secondary sales). Even in China’s most developed markets the ratios were just 1.30 for Beijing, 1.56 for Shanghai, and 1.35 for Shenzhen. [Keep in mind that an immense quantity of existing housing stock was privatized in the 1990s, at nominal prices, so the explanation cannot be simply that China is a "new" market -- China actually has a higher rate of established home ownership (80%) than the U.S. (70%)]

inconvenient wrote:ppl here borrowing money to "buy" houses like crazy, companies building poor quality houses without conscience. dont know why shanghai locals just have that type of insane and addictive fever over house issue like nobody else in the world. even ayis in companies can re-educate us real estate spirit like pros, and brag about how rich they'll be by gov's compensation when their creepy houses be tore down in suburb in future.

why so many shanghai ppl(esp shanghai women) r sooo in deeply love with house here? date with house-owned condition, marry for the house only (no romance, no communication, no interests sharing, etc), most hilarious shanghai-exclusive story i have ever heard is the canceling of the wedding we r supposed to attend. the bride-to-be just cancelled her own marriage a few days before wedding coz her hubby to be didnt obey her to put her name in the household certificate, which means the house only owns by her hubby who bought the house, and she's not officially owns the house, in addition, cant get a half of money of selling the house after divorcing him (admire her super power of seeing things in such a long run).

owns a cold house without a real family full of love, renovate a house to make it like a king's castle to show off and gain face but acts like st gangsters with even not hygienic clothes, eat dog's food plus live a beggar's life to pay off debt for the rest of life, one eating out experience or one movie only brings guilty of adding burden to their house debt instead of joy.

what's that all about?

fWerrF wrote:i am not really concerned with the real estate market in the near future.
the highend property price per sq-m is just on par with Manhattan price, hong kong and japan are way higher. there is still more up than down at this point.
i would buy. no one is forcing you to hold on to it forever, as long as you sell it higher, its a solid move. i fear nothing. mark my words and come back to this thread in a year

KalanStar wrote:The government has just banned the practice of "mortgage referrals". MR's are when real estate agencies 'recommend' a specific bank for the purchaser to finance their home. Banks have been giving up to 5% commissions on the mortgages until now. To give incentive to the buyer, prices were often reduced to get them to go to the 'right' bank. Since this has stopped, or is being stopped, real-estate agencies are reporting about a 40% drop in revenue. The government has also raised the percentage required for down payments and are set to raise interest rates. They hope these efforts will begin to deflate the housing market in Shanghai.

root wrote: BTW: last year we made 400% profit from invested capital.

and what did u buy yourself as a reward after?