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China's Property Market To Collapse In Q4

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http://www.chinadaily.com.cn/bizchina/2010-07/06/content_10068944.htm

Housing prices 'to fall in Q4'

By Hu Yuanyuan and Cheng Yingqi (China Daily)

Updated: 2010-07-06 09:10

Minister's remarks 'reflect govt's resolve to cool property market'

BEIJING - Property prices are likely to start falling in the last quarter of the year as tightening measures for the sector continue, officials and analysts have said.

Dropping sales volume and stagnant prices could lead to a deeper price slump in the market, Minister of Land and Resources Xu Shaoshi said on Sunday.

"In about three months, the property market will probably reach a comprehensive correction and prices will fall in some areas. But it's hard to predict the extent of the price drop, which may vary from city to city," Xu was quoted by China News Service as saying at a conference in Dalian, Liaoning province.

The ministry will strengthen property management and clear up idle land to ensure land supply for affordable housing, he said.

Xu's latest remarks reflect the central government's resolve to curb excessive property prices, said Grant Ji, director of real estate service provider Savills (Beijing).

In late June, the Ministry of Housing and Urban-Rural Development held a forum in Qingdao and pushed for an individual housing information system to supervise mortgages and stem speculative activities in the housing market.

Similarly, Hu Cunzhi, chief planner of the Ministry of Land and Resources, said at a recent forum that the government will raise the threshold for developers to bid for land, asking them to set aside money that is 30 percent of the land's bottom price - as compared to 20 percent previously - during the bidding process.

"All these measures are aimed at managing people's expectations - the price will fall, as an expectation for loosening policies will lead to a strong rebound in prices," Ji said.

Since April, the government has launched a slew of measures to cool down the sizzling property market, including tightening bank lending as well as hiking down-payment and mortgage rates for second-home buyers.

Property sales volume has since plummeted, but prices remain stable.

Realty prices in 70 major cities nationwide rose 12.4 percent year-on-year in May, compared to the record 12.8 percent hike in April, figures from the National Bureau of Statistics showed. The month-on-month increase was 0.2 percent in May, compared with 1.4 percent in April.

Many people had expected housing prices to drop. According to a recent survey by China Index Academy, of the 964 Beijing homebuyers polled, 39.2 percent expected a slight drop in realty prices, while 19.8 percent anticipated a steep fall. Only 2.5 percent of those polled believed prices would continue rising.

Half of the respondents also believed that government policies were well enforced, compared to less than 20 percent of respondents in the first quarter. Only 8.3 percent of those polled said they would immediately buy a home, compared to nearly 18 percent in the first quarter.

"The housing agency next to my company has had much fewer visitors in recent weeks," 24-year-old Beijinger Wang He said.

"I believe housing prices will come down if the government really wants it to."

A substantial price adjustment may come in the fourth quarter, when property developers' cash flow tightens after slow sales and increasing difficulty in obtaining financing, said Lin Lei, marketing chief of US-listed real estate brokerage Century 21st.

"Property developers' best solution is to cut prices before more stringent policies are rolled out," Lin said.

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Looks like it's all over the the BRICs for a while...

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Well done China! I suspect they have recognised HPI as a disease and not a productive industry. They will kill it before it becomes ingrained as it has in our country. Daresay speculators and EAs in China will be given some cultural re-education after it all goes Peter Tong.

Well done Chinese chaps!

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Well done China! I suspect they have recognised HPI as a disease and not a productive industry. They will kill it before it becomes ingrained as it has in our country. Daresay speculators and EAs in China will be given some cultural re-education after it all goes Peter Tong.

Well done Chinese chaps!

A friend went to China recently, he said Shanghai is a very modern and efficient city. And expensive.

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China: investors shrug off Rogoff

Another day and another warning of a “collapse” in China’s property market. This time it comes from Kenneth Rogoff, the Harvard University professor and former chief economist of the International Monetary Fund, who told Bloomberg Television “You’re starting to see that collapse in property and it’s going to hit the banking system.”

But the markets were not overly impressed with Rogoff’s dire pronouncement, with investors enjoying a modest recovery this week in Chinese equities and all eyes fixed on Agricultural Bank’s huge IPO. Nomura’s chief China economist, Sun Mingchun, said in a note: “Despite the importance of the property sector in the economy, we believe that the deflating of this bubble should have only a limited impact on the real economy and the banking system.”

The Shanghai Composite closed up 1.9 per cent, with property stocks leading the way.

http://blogs.ft.com/beyond-brics/2010/07/06/china-investors-shrug-off-rogoff/

Gosh you are now ramping China. You do know that OZ is a one trick pony economy heavily reliant on China.

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  • 152 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
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      • up 5%



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