Tuesday, May 11, 2010

Chinese government recognise that developers inflate the market

China seeks to tame property boom

The Chinese government is desperately trying to cool down an overheating property market. New measures introduced in the past few weeks restrict mortgage lending, increase land supply and stop developers from hoarding apartments to push up prices.

Posted by powerofnow @ 08:13 AM (955 views)
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11 thoughts on “Chinese government recognise that developers inflate the market

  • Housing should to be seen first as a moral issue rather than an investment issue, with the housing needs of people prioritised before the investment wants of land speculators.

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  • The Chinese have learnt nothing from the west.

    Wait untill there is no money from the west to buy up their junk production capacity.

    More Chinese rioting, unemployment and property foreclosures on the horizon.

    We will be screaming for a ‘new world’ system by then and I have a feeling someone will have the unsavory solution. JOB DONE.

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  • Developers do not drive up prices. They might be able to ‘hoard’ for a short time but ultimately cash flow dictates that they have to release their product onto the market. If developers build a lot of houses, they will eventually drive prices down.

    I don’t understand why developers are so often vilified or implicated in the ramping of house prices. We need developers to build as many houses as possible. Like any business, they try to maximise their profits but their pricing power will always be limited by the volume of their output.
    The government obstructs developers at every turn. They are ridiculously miserly with planning permission and they insist on all sorts of expensive surveys and reports. I was recently asked to provide a noise survey, a soil report and an abrocultural method statement for a small development. The total cost of these entirely unnecessary reports is in the region of £3000. The new planning wheeze is a compulsory infrastructure charge per new house of about £10,000 in addition to the thousands they charge for processing planning and building control applications (slowly). All these costs drive up the price of the finished product, so if anyone is guilty of driving up prices it is the government.

    HPC’ers should be aiming their venom at the governments house prevention systems. We need a house building boom and developers are the only people capable of providing one.

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  • happy mondays says:

    powerofnow unfortunately it does not work that way, until this system is broken down & fixed for stability & building decent communities, not growth or profit it will continue to suit the few, mainly investors!

    “We can’t solve problems by using the same kind of thinking we used when we created them.” A Einstein

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  • I estimate that the unnecessary/new charges and fees levied on developers adds about 20% to the retail price of a new home.

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  • 3. flashman

    Who makes the largest gains from high house prices?

    Who creates the population dynamics and the financial platform?

    Who does government really serve? Agreed flash.

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  • Unctuous Chinese estate agent says “now is the best time to buy”.

    Some things have a universal language.

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  • mark wadsworth says:

    As Flash says, we ought to stop this kneejerk developer bashing. It’s like blaming Volkswagen for all the cars on the road. Sure, developers are to a large extent land hoarders (in 2009 they mothballed all their developments and have now started work again) but that’s a secondary issue.

    As to China’s property bubble, they only have to look across the water to Taiwan and realise that Land Value Tax would sort that out.

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  • Flashman – I don’t see why we need a house building boom. Take a look around you – we might as well tarmac the whole country! What we need is sensible interest rates and a tax system which promotes houses being lived in rather than an investment.

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  • timmy: I agree with you that we need sensible interest rates and a fair tax system. However a building boom would make housing affordable for everyone and would put an end to the btl iniquity for good. At the moment the planners make it very hard for builders to utilise roof space and basements. Basements and roof spaces are not quite as good as normal space but the planners make you count it as if it is, even thought the ceilings might be lower or sloping. In my opinion it should be illegal to build a house in a crowded country without a basement and developed roof space. That way the footprints would be half the size and gardens bigger. In my opinion we could build another million of these houses without using any more space, particularly as there is a ton of shitty brown field land that could be better used. There are also currently more than a million pre war bungalows that are literally rotting away. They are relatively cheap to buy but the planners hardly ever allow you to build a two-story house on these sites. If they allowed a two story houses PLUS basement and developed roof, you could easily fit two detached houses per plot and still have two decent gardens because bungalows take up almost 3 times more space than ‘my’ design. I once wrote a letter to the Government about this but of course received no reply. I estimate that we could build between 1 million new homes on ex Bungalow sites alone, without using up an inch of extra land

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