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Chinese Houses In A Frenzy Despite I R Hikes

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http://uk.finance.yahoo.com/news/China-house-prices-rise-tele-3078884531.html;_ylt=ArEz0fv_J5UFijp94D78nifSr7FG;_ylu=X3oDMTE5b2dzbGgyBHBvcwMxMgRzZWMDeWZpVG9wU3RvcmllcwRzbGsDY2hpbmFob3VzZXBy?x=0

China house prices rise despite curbs to deflate bubble
Peter Foster, 8:10, Friday 18 February 2011
China’s sky-rocketing property market is still going up, despite a raft of cooling measures introduced by the Chinese government in recent months, official data for January has shown.
A survey of 70 of China’s largest cities showed year-on-year prices rising in all but two urban centres, with ten major cities showing price gains of 10pc or more. Beijing prices were up 6.8pc from a year ago, while Shanghai grew by a more measured 1.5pc.
The monthly data from China’s National Statistics bureau will deepen concerns that China is still not doing enough to suppress a property bubble that has been pumped up by a three-year long credit splurge from China’s banks.

HPI disease cannot be cured. It must continue until it destroys all around it--jobs, the currency, infrastructure.

The Chinese just need to look at what the Brown bubble did to UK Plc--or rather what it is about to do as the aftermath has been slow in coming as they tried to keep the Brown bubble inflated.

My advice to the Chinese: Sit back, watch it inflate and do your best to stand clear when it pops. Then, make sure it doesn't happen again.

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http://uk.finance.yahoo.com/news/China-house-prices-rise-tele-3078884531.html;_ylt=ArEz0fv_J5UFijp94D78nifSr7FG;_ylu=X3oDMTE5b2dzbGgyBHBvcwMxMgRzZWMDeWZpVG9wU3RvcmllcwRzbGsDY2hpbmFob3VzZXBy?x=0

China house prices rise despite curbs to deflate bubble
Peter Foster, 8:10, Friday 18 February 2011
China’s sky-rocketing property market is still going up, despite a raft of cooling measures introduced by the Chinese government in recent months, official data for January has shown.
A survey of 70 of China’s largest cities showed year-on-year prices rising in all but two urban centres, with ten major cities showing price gains of 10pc or more. Beijing prices were up 6.8pc from a year ago, while Shanghai grew by a more measured 1.5pc.
The monthly data from China’s National Statistics bureau will deepen concerns that China is still not doing enough to suppress a property bubble that has been pumped up by a three-year long credit splurge from China’s banks.

That is absolutley not the thing to do. The were on the right track and then whimped out, that is why they have this problem now. They did effectively bail out the activity and encouraged it more.

HPI disease cannot be cured. It must continue until it destroys all around it--jobs, the currency, infrastructure.

The Chinese just need to look at what the Brown bubble did to UK Plc--or rather what it is about to do as the aftermath has been slow in coming as they tried to keep the Brown bubble inflated.

My advice to the Chinese: Sit back, watch it inflate and do your best to stand clear when it pops. Then, make sure it doesn't happen again.

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Theirs is going to be even worse. The Chinese people see rampant inflation and no state pension scheme and thus surmise the only store of value available to them is property.

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Theirs is going to be even worse. The Chinese people see rampant inflation and no state pension scheme and thus surmise the only store of value available to them is property.

And that yellow stuff

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Met a guy at a talk this week who works at Oxford organising big delegations of Chinese to the UK to see how we do things...oops.

We shouldn't flatter ourselves they aren't here to learn anything, they are here to shop and have their picture taken in front of Big Ben. Stuff remains far cheaper here than in the ripoff shopping malls in Chinese cities expressly designed to part those who have got rich in the last 20 years with their money. Those willing to travel know this.

The whole property thing will end badly. Nothing is more certain. The problem is the newly rich have so few options as to where to put their money. It's a disaster waiting to happen and is sure to disrupt those straight line graphs of China's 'peaceful rise'.

Watch out when it happens and the regime looks for external scapegoats to distract people from internal misery. If I was a corporation heavily invested in China I'd be looking to repatriate knowledge and expertise (and capacity).

Sad but true ... I visit at least once a year myself and there's zero awareness of what's to come.

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Theirs is going to be even worse. The Chinese people see rampant inflation and no state pension scheme and thus surmise the only store of value available to them is property.

Yep, clearly the Chinese see property as a store of wealth, don't houses lose value in China when they are lived in?

Then you have to factor in local govts ramping the situation even more to ensure they meet growth targets... Clearly a sustainable position all round.

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China's policy of pegging the Renminbi to the dollar is leading to it 'importing' much of the inflation that the Fed is generating.

It's therefore no surprise that they aren't having much success in curbing their inflating property bubble when they are essentially acquiescing to general inflation as a matter of economic policy.

If they want to avoid all out bubble explosion they need to allow the RMB to appreciate and their population to enjoy increased purchasing power. That will have the effect of pushing a hell of a lot of inflation back to the West.

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Chanos said it's 70% of Chinese GDP vs 16% of US/UK GDP at our housing peak.

Grantham's average lifecycle for bubbles is 3.5 years on the way up and 3 yrs on the way down, back to trend.

It's getting ever closer and when this falls over it's going to reverberate around the world.

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http://uk.finance.yahoo.com/news/China-raises-bank-reserves-reuters_molt-728707881.html?x=0

China raises bank reserves to record in inflation fight
Langi "Wang" Chiang and Kevin "Kev" Yao, 13:41, Friday 18 February 2011
BEIJING (Reuters) - China on Friday raised required reserves to a record 19.5 percent, adding to an increasingly aggressive effort by Beijing to stamp out stubbornly high inflation.
The fifth increase since October, all in increments of 50 basis points, will force the country's lenders to lock up a bigger chunk of their deposits at the central bank from next week, removing cash from the fast-growing economy that otherwise would be pushing prices higher.
The move by the People's Bank of China followed an acceleration in inflation to 4.9 percent in the year to January, which was accompanied by worrying signs that price pressures were spreading beyond food to property and consumer goods.

Poor sods. :(

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China and Hong Kong see more house price up and down more than UK, the main different in HK to UK is that, when house price drop, gov will allow the market to correct itself. meaning high risk investor (gambler) will lost all their money. e.g, during the last down turn, house price dropped more than 50% within 2 year but house inflation in HK last year is above 20%, meaning investor get burn but not real house owner.

Unlike UK, the whole country is here to support the high risk invester such as williams family.

Moreover, they need 30% deposit in order to buy a house in HK and the transition is approximately 2 to 4 weeks compared to 3 month to 6 month in UK. meaning the bank will have no problem to sell the house if they can't pay the mortgage.

and beside, Chnia gov is putting a lot of mearsure to claim the HPI in china, such as extra tax, increse IR. what did UK done when the house price was out of control in UK?

Edited by yoman

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China has openly acknowledged that the general inflation and housing inflation is a serious problem and say they're trying to do something about it and curb it with recent measures including interest rate rises, property taxes, new limits on the number of properties owned etc and raising bank reserve limits etc. It might not be enough yet but at least they openly acknowledge it's a serious problem.

A diffferent approach to the UK's it's all contained, under control, forget about it, nothing to worry about, do keep buying as many houses as possible at as high a price as possible approach - right upto the very end and it started to crash and now crazily trying to revive it with that same old stuff. Of course as has been said many times before the UK's economy hasn't got anything else now and the economy's flatlining.

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China has openly acknowledged that the general inflation and housing inflation is a serious problem and say they're trying to do something about it and curb it with recent measures including interest rate rises, property taxes, new limits on the number of properties owned etc and raising bank reserve limits etc. It might not be enough yet but at least they openly acknowledge it's a serious problem.

It's funny isn't it - all those attempted fixes and yet, as here in good old Blighty and the US, no limit on lending multiples - a simple "no mortgages at more than 4x salary or 10x rental income" and it's fixed, for ever. :rolleyes:

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Anyone watched the Carrie Gracey China prog, focusing on the transformation of a once rural farming community into a metropolis in the space of 12 months?

Very telling fly-on the wall stuff when a family congregate in one of the new flats villagers have managed to acquire. The former village party leader (ie supposedly died in the wool communist) is asked by his daughter why he doesn't get a piece of the action (work) in the larger cities. He remarks he is too old for that sort of thing. Instead, notcing how property has shot up, he thinks a more sensible course of action will be to become a property investor ....

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It's funny isn't it - all those attempted fixes and yet, as here in good old Blighty and the US, no limit on lending multiples - a simple "no mortgages at more than 4x salary or 10x rental income" and it's fixed, for ever. :rolleyes:

In china and HK, a lot of people do fliping property whch do not need a mortage, they pay a disposit and hope to sell it berfore they require a mortage and make a good money out of it.

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In china and HK, a lot of people do fliping property whch do not need a mortage, they pay a disposit and hope to sell it berfore they require a mortage and make a good money out of it.

And who buys from them?

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And who buys from them?

Good question, you ever play the game of passing the bomb?

House price crash period = Peak Suicide period

But for buyer for living is fine as the price will go back up normally within 3 to 5 year.

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the difference in the chinese bubble it has to be said though, is that a lot of people are buying houses with pure cash.

you are required to put a 60% downpayment minimum, to buy a second home.

in some cities people are banned from buying a second home if prices are already high.

the problem there isnt people doing lots of a no money down buy to lets. they are awash with cash and with money being eroded by inflation, they are parking their cash into property as an asset.

so theyre not necessarily buying as a future investment but a current investment - they already have the money in their pockets.

Edited by mfp123

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  • 312 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% +
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      • Even
      • up 2.5%
      • up 5%



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