Seeking Alpha

Chinese property sector cools further

  • New home prices increased in 44 out of 70 Chinese cities on a monthly basis in March, down from 56 in April and the lowest number since October 2012.
  • Prices fell in eight cities, double the amount for March.
  • Of China's largest metropolises, Beijing's costs increased just 0.1%, the slowest pace since September 2012, while in Shanghai prices rose 0.3%.
  • The property sector had been been fairly torrid until early this year, when government measures to restrict house buying and rein in lending started to have a more notable impact. However, the cooling of the sector comes amid concerns about the slowdown in the broader economy.
  • ETFs: FXI, PGJ, GXC, FXP, KWEB, YINN, CYB, HAO, CNY, ASHR, CHIQ, DSUM, YANG, TAO, CHIX, CQQQ, MCHI, QQQC, PEK, XPP, YAO, CHXX, YXI, FXCH, CHXF, CHII, ECNS, CHIM, CHIE, FCA, KFYP, CHLC, TCHI, CN, CHNA, KBA
Comments (4)
  • jasonlee
    , contributor
    Comments (6) | Send Message
     
    In 1981, 1.5 CNY=1USD, now 6.3CNY=1USD.

     

    Any of China's issue will resolved, if let market decide CNY's exchange rate.

     

    Chinese housing market is one of biggest joke on the world.

     

    That house even not a house, just a apartment only. Price in each square meter about USD 1200. If calculate lands price, that could be USD 30000 per square meter or more.

     

    Who behind high land price? Local government push it.
    19 May, 07:14 AM Reply Like
  • Regular Joe Investor
    , contributor
    Comments (126) | Send Message
     
    I just wanted to add my thoughts and opinions on China's Real Estate Market.

     

    There is an oversupply of housing in China. Everyone knows it. Nowhere else in the world has there been so much construction for residential housing, commercial, and office space than there has been in China the last 10 years. This has led to a huge surplus in housing. Nowhere else in the world are there entire Ghost Cities as there is found in China.

     

    Demand is slowing because the people who can afford to buy houses in China have already bought one. Otherwise, the people who have not yet bought a house, can not afford to buy one.

     

    The price of housing is so high that the average Chinese person is unable to afford to buy a house. So, who is left to buy the homes? The rich, the investors, Chinese companies investing it’s money, REIT’s, and the government. But the funny thing is that the average individual home owner, can no longer afford to buy a house.

     

    Due to the high cost of the housing and the lower demand for it…something has got to give and eventually the prices of housing must start to come down. And when this does, the developers and property owners will panic…causing a mass selling spree…which will ultimately cause a housing market crash. And a housing market crash, I believe, will wreck the Chinese Economy.

     

    The rich, who are able to buy houses, are now looking to invest their money over seas. Overseas investments have increased significantly from last year.

     

    Investing in empty homes is like burying money into the ground. And anyone who has ever owned a House know that houses Deteriorate and will need maintenance over time. This is something the Chinese do not appear to be thinking about at this time.

     

    There is less and less land available to sell and this is where cities get upwards of 60% of their revenues. So the Cities will need to at some point, come up with another source of Revenue…which will eventually lead to Property Taxes. And an empty home with Property Taxes is a money losing proposition. And if the Cities do nothing…then, in the end…they’ll run out of money…

     

    There will be less and less land to build on over time. And the land to build will continue to get more expensive over time.

     

    More expensive land, coupled with a discounted property Market is signaling the end for many Real Estate Developers in China. And ss housing slows in China, it will affect the housing materials industry as well.

     

    It is also getting more expensive for Real Estate Developers to get loans in order to buy land develop properties.

     

    It is getting more expensive for Consumers to get loans to buy houses.

     

    If the Real Estate Developers cannot sell the finished Residential Houses and Commercial Buildings, then the Banks will be left holding the bag for the outstand loans. And the houses and buildings are really not worth that much...empty and unwanted.

     

    And as for the Shadow Banks…I believe their money comes from the Chinese People…who’ll be left with loans…which will not be repaid once the real estate market crashes.

     

    China’s population is not increasing. China has had a one child policy for the last 35 years.

     

    I have read that Land in China is leased to Developers for 70 years. “Leased” ! Check it out. And wording on the lease contracts are not clearly spelled out as to what happens when the 70 year lease term expires. Wow!

     

    Moody’s changed it’s Chinese Property Industry Outlook from Stable to Negative on 5-20-14.

     

    China’s Richest man has sold all of his property in China…only to invest in Europe. Li Ka-Shing has a reputation of seeing things ahead of everyone else. He is an incredible real estate investor. If Li Ka-Shing is selling, why aren’t you?

     

    I invest a little money on the side. I’m a small timer. And these are just my observations and opinions. Not trying to hurt or offend anyone. Thank you.

     

    I firmly believe a real estate Crash in China will happen at some point. I don’t know when, but from history…we all know what happens to bubbles…

     

    Full Disclosure: I have Put options on China ETF’s.
    23 May, 12:39 AM Reply Like
  • Regular Joe Investor
    , contributor
    Comments (126) | Send Message
     
    A Typical Apartment in Shanghai Costs More Than 45 Times The Average Residents.

     

    So what started out as a comment on Seeking Alpha is turning into an official seeking Alpha Instablog article. I’m going to discuss my observations and opinions regarding the housing bubble in China, and what I expect to happen sometime in the near future. I am not a financial professional. I invest a little money on the side. I’m a small timer. Just an average Joe. And these are just my observations and opinions. I am certainly not trying to hurt or offend anyone. Thank you. The Link is below.

     

    http://bit.ly/1omrNsC
    26 May, 02:04 PM Reply Like
  • Regular Joe Investor
    , contributor
    Comments (126) | Send Message
     
    Hear it from a China Real Estate Chairman.

     

    Chairman of China's #2 Real Estate Developer by Revenue sounds pretty bearish.

     

    He says that the Chinese real estate market is looking more like the Titanic headed in the direction of an iceberg.

     

    Check it out: Here's the link.

     

    http://on.wsj.com/TORTYz
    27 May, 12:54 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|