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Realistbear

30% H P C Forecast For China

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http://www.telegraph.co.uk/finance/china-business/7875713/Chinas-property-market-braced-for-30pc-drop.html

China's property market braced for 30pc drop
Standard Chartered has told clients to prepare for a fall in property prices of up to 30pc in Beijing, Shanghai, Shenzen, and other large cities in China as the delayed effects of monetary tightening begin to bite.
By Ambrose Evans-Pritchard
Published: 10:28PM BST 06 Jul 2010
Migrant workers from outside China's major cities have flooded to fill jobs created by the construction boom. Here a worker in Shanghai steps outside his temporary accommodation to check his phone.
Stephen Green, the bank's China economist, said a glut of newly built homes were hitting the market just as buyers are restrained by higher down-payments and curbs on speculation. "We believe developers will be forced to cut prices," he said.
Kenneth Rogoff, ex-chief economist for the IMF, told Bloomberg Television in Hong Kong that the denouement could prove abrupt after such a torrid boom. "You're starting to see that collapse in property and it's going to hit the banking system," he said.

Once that market implodes it will dampen growth and intensify the double dip in the West.

With China's HPC underway it looks like we are the last man standing in the world.

How much longer can we keep up the questionable achievement of having the world's most overpriced houses? I cannot see it lasting through winter without some significant falls. As always the key triggers will be the ability of people to pay the exorbitant prices (not so much due to demand as there is a lot of demand for the latest Ferrari). With tighter credit and fewer jobs the propscts are looking good for a crash. Lets hope that when it comes it is not allowed to happen again.

HPI is a disease to be treated not a benefit to be exploited.

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http://www.telegraph.co.uk/finance/china-business/7875713/Chinas-property-market-braced-for-30pc-drop.html

Standard Chartered has told clients to prepare for a fall in property prices of up to 30pc in Beijing, Shanghai, Shenzen, and other large cities in China as the delayed effects of monetary tightening begin to bite.

Stephen Green, the bank's China economist, said a glut of newly built homes were hitting the market just as buyers are restrained by higher down-payments and curbs on speculation. "We believe developers will be forced to cut prices," he said.

Kenneth Rogoff, ex-chief economist for the IMF, told Bloomberg Television in Hong Kong that the denouement could prove abrupt after such a torrid boom. "You're starting to see that collapse in property and it's going to hit the banking system," he said.

The government is trying to deflate the housing market gently, mostly using tools known as "financial repression" rather than Western style rate rises. Xu Shaoshi, land minister, said sales are already dropping. "In another quarter's time or so, the property market will probably come to a full correction and prices will fall. It's hard to say to what extent they will fall," he said.

At the same time, China is shifting its foreign reserve strategy, rotating out of Europe and into Japanese government bonds (JGBs). Japan's finance ministry said China bought $6bn (£3.9bn) of bonds from January to April, a record pace of accumulation.

Analysts say Beijing is hunting for fresh places to park its reserves after losing confidence in eurozone debt. It already holds around 70pc in dollars, a level deemed too high by many in Beijing. China's move helps explain the fall in yields on 10-year JGBs to just 1.06 pc last week, and why the yen has appreciated to ¥87 to the dollar -- nearing levels last seen in 1995.

China views soaring house prices as a threat to social stability, since workers are shut out of the market. The price-to-earnings ratio is 13 in Beijing and Shanghai, four times Western levels.

Charles Dumas from Lombard Street Research said China's boom had been driven by its fiscal stimulus of 13pc of GDP, the largest ever by major country in such a short period. The boost was concentrated in 2009, with credit growth running at 25pc of GDP.

Happy now votewithyourfeet? :P

Still I'm sure China can engineer a soft landing.

It's contained and I'm sure the losses can be absorbed.

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Love this quote:

"The Chinese had nowhere to put their savings since real interest rates were negative...

Take mortgage to buy house. Increase in broad money growth stokes inflation. Must buy more houses to protect wealth...

:unsure:

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The collapse of the West had to feed through eventually.

Linda Yeuh on the BBC yesterday saying China is relying on M2 growth this year to keep the economy going. Credit then. Oh dear.

Was it "Wen" or "Hu" that said they were mothballing factories because of "environmental concerns" about pollution? Sounds like claptrap to me. China's soooo over... for now.

Edited by AvidFan

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The collapse of the West had to feed through eventually.

Linda Yeuh on the BBC yesterday saying China is relying on M2 growth this year to keep the economy going. Credit then. Oh dear.

Was it "Wen" or "Hu" that said they were mothballing factories because of "environmental concerns" about pollution? Sounds like claptrap to me. China's soooo over... for now.

You are sooooooo wrong.

The Chinese can manipulate their markets better than the west.

They have avoided letting the Yuan soar.

As a nation they have it made - compliant cheap workforce and billions of 'em and the east needing them to produce more tat.

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My parents have just visited Beijing.

Their tour guide told them he'd bought a flat a few years ago for USD250,000 and now it was worth USD500,000. From the sound of it, it was a shell, ie no kitchen and bathroom, and hence no tenants.

My mum asked how people could afford these sorts of prices because wages are v low by western standards - tour guide responded that companies give their employees fake payslips!!!!

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  • 140 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
      • up 2.5%
      • up 5%



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