Homepage
PR Newswire
18-08-2014, 09:45 PM
ValueBuddies.com : Value Investing Forum - Singapore, Hong Kong, U.S.
›
ValueBuddies.com
›
Property
China Property Market
China Property Market
China Property Market
18-08-2014, 10:31 PM
(18-08-2014, 09:45 PM)greengiraffe Wrote: Actually, its a start of QE in closed China... Don't think China is doing much of a QE this time round, Chairman Xi seems rather keen on clamping down on corruption for the better of the nation. If you read Mingtiandi website apparently china developer Fantasia's founder is in some trouble too. http://www.mingtiandi.com/real-estate/fi...8-percent/ No surprise why LKS exited china early, he probably has lots of ears on the ground and knows about such political events happening which will have significant financial impact. SGX may go towards 2700 levels it did in 2012 again.
Virtual currencies are worth virtually nothing.
http://thebluefund.blogspot.com 
18-08-2014, 10:56 PM
Don't think China property will have any adverse impact on STI...
Will appreciate your explanation on your bearishness... (18-08-2014, 10:31 PM)BlueKelah Wrote:(18-08-2014, 09:45 PM)greengiraffe Wrote: Actually, its a start of QE in closed China...
18-08-2014, 11:09 PM
I have been "longing" for STI to crash towards 2500 and below. But however, it has been very "stubborn"..
(18-08-2014, 10:31 PM)BlueKelah Wrote:(18-08-2014, 09:45 PM)greengiraffe Wrote: Actually, its a start of QE in closed China...
[I am not here to promote any stocks. Please always do your own research before embarking on any investment decision. I will not be liable for any of your own decisions. Your use of any information or materials is entirely at your own risk. It is your responsibility to ensure that any products, services or information meet your specific requirements. I do not produce material which meets the objectives of any specific financial and risk profile of investors.]
18-08-2014, 11:11 PM
Must be steadfast in your belief...keep shorting STI and one day u will be proven right...
(18-08-2014, 11:09 PM)Curiousparty Wrote: I have been "longing" for STI to crash towards 2500 and below. But however, it has been very "stubborn"..
18-08-2014, 11:12 PM
(This post was last modified: 18-08-2014, 11:14 PM by Curiousparty.)
Just imagine a counter paying you at least 4 cents dividend every year and still trading at 50 to 60 cents
 I really hope good counters crash So far, no sign whatsoever at least from forex market yet to indicate that a big crash is coming.... USD YEN still trading well above 100. Aussie dollar is still very resilient. (18-08-2014, 11:11 PM)greengiraffe Wrote: Must be steadfast in your belief...keep shorting STI and one day u will be proven right...
[I am not here to promote any stocks. Please always do your own research before embarking on any investment decision. I will not be liable for any of your own decisions. Your use of any information or materials is entirely at your own risk. It is your responsibility to ensure that any products, services or information meet your specific requirements. I do not produce material which meets the objectives of any specific financial and risk profile of investors.]
19-08-2014, 11:27 AM
(This post was last modified: 19-08-2014, 11:29 AM by specuvestor.)
(18-08-2014, 09:45 PM)greengiraffe Wrote: Actually, its a start of QE in closed China... Err QE in China? China PBOC base interest rates still at 6% What we observe from Xi and Li in almost a year now is that they are very long term constructive and proactive. I have the sense that they set the agenda rather than let noise dictate what they should do. Those who are hoping for a loose monetary condition or short term fiscal fix will be disappointed, unless China activity decelerates significantly below 7%.
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward
Think Asset-Business-Structure (ABS)
19-08-2014, 10:37 PM
Macquarie link to China bankruptcy
Lisa Murray 438 words 20 Aug 2014 The Australian Financial Review AFNR English Copyright 2014. Fairfax Media Management Pty Limited. Shanghai A Macquarie-backed trust company has been caught up in China's shadow banking woes following reports that one of its property development clients is bankrupt. Handan Golden Century, a developer based in the central province of Hebei, is struggling to repay 2.9 billion yuan ($506 million) in debts and its major shareholder Shi Yubao may have skipped town, according to reports in Money Week and Handan News. Handan Golden Century was the guarantor for a trust product launched last month by the Sino Australian International Trust Company (SATC), which is just under 20 per cent owned by Macquarie. The product, known as Changying No. 66, is backed by a 280 million yuan loan to Linyi Golden Century, which is also controlled by Mr Shi, according to the Beijing-based business magazine, Money Week. Asked whether Macquarie was concerned about the reports, or taking any action in response to recent events, a spokeswoman declined to comment. Macquarie was one of the earliest investors in China's trust sector, which grew rapidly over the past five years as companies with higher-risk profiles such as coalminers and property developers, sought finance from outside the big banks. In 2009, Macquarie joined forces with two Chinese state-backed firms to set up SATC and the likes of JPMorgan, Morgan Stanley and Barclays Bank followed suit. The trust sector has been troubled this year by a series of near defaults and government bailouts, however, highlighting the strains in China's poorly regulated shadow banking sector. China's debt levels have been growing rapidly, with total outstanding credit rising an average 22 per cent a year over the past decade. Much of that growth has taken place in the shadow banking system. Amid deepening concern about rising corporate and local government debt levels, regulators began tightening regulation and restricting the types of products trusts could sell, crimping their growth. This is not the first time the Macquarie-backed trust has been in the headlines. Two years ago, it reached a high-profile legal settlement with Dalian Shide Group, which was owned by corrupt businessman Xu Ming. Mr Xu later gave evidence in the trial of former Communist Party high-flyer Bo Xilai. Macquarie had attempted to sue Dalian Shide after Mr Xu disappeared. Following the settlement, Macquarie's then chief executive in Asia, Alex Harvey, said he was "quite encouraged about SATC, about the risk management framework we've now put in place over the last few years and the sort of opportunities that are in front of the trust." With Lucy Gao Fairfax Media Management Pty Limited Document AFNR000020140819ea8k00003
23-08-2014, 08:34 PM
Ghostly ghettos
Angus Grigg and Lucy Gao 1630 words 23 Aug 2014 The Australian Financial Review AFNR English Copyright 2014. Fairfax Media Management Pty Limited. Holding pattern In China, few people cared that investment apartments stood empty, they were still great assets. But now that's beginning to change, write Angus Grigg and Lucy Gao. The front door is still wrapped in plastic and the only fixture inside is a discoloured toilet. Water is pooling where the kitchen should be and a lone banana tree is competing with weeds in the courtyard. It's not an abandoned apartment or even a crime scene, but how property speculation works in China. Apartment 102 in this housing development on the outskirts of Shanghai was completed five years ago and has been kept deliberately vacant ever since. It's an empty shell, without water or electricity. The owner, a businessman from the coastal city of Wenzhou, didn't bother with tenants, believing any rent collected would be immaterial compared to the capital gains earned. He was not alone. Real estate agent Ouyang Shuling told AFR Weekend that 40 per cent of the 3000 apartments in this Future City complex were sold but never occupied, after construction finished in 2009. For the owners, it was a naked bet on the continuing strength of Chinese property prices. And it was not confined to this suburb on the edge of China's commercial capital. Gan Li, a professor at Texas A&M University, estimates there are 48 million empty properties across China, equating to a vacancy rate of 22.4 per cent. In truth, this is a best guess, and vacancy rates were not considered a problem until recently, as even the most bearish pundits conceded that most buyers were not highly leveraged and had few other investment options. It's all part of the Chinese psyche. In a country with limited asset classes, where investors are wary of even government securities and business dealings are opaque, real assets such as property have huge appeal. It's not just the capital gain that appealed to investors. Through property comes security, and there is no safer investment than a house. No worries if there is no yield, even if an apartment generates only modest capital gains – this is preferable to the negative real interest rates being offered by the banks, the unpredictability of gold prices and a sharemarket which is more like a casino. But there was one small problem with this idea – it relied on Chinese investors continuing to believe that local property offered the best long-term returns. For the past decade, this story remained intact, until the sector began to wobble in May as the economy slowed and banks reined in credit. On with the selling Now, the selling has begun. And while some are forecasting a pick-up in coming months, the chief China economist at UBS, Wang Tao, says the most optimistic prediction would be for the property sector to stabilise. "We believe property is the most important sector in China," she wrote in a research report titled Bubble Trouble. "The biggest uncertainty for the Chinese economy now and in 2015 is the nature and duration of the ongoing property downturn." She argues the sector has reached a structural turning point and has some scary numbers to back that up. Once it was said that if Wall Street sneezed, the world caught a cold. Now it's China that investors look to for spreading contagion. That's all the worse for inadequate data, shadow markets and unpredictable government policy. The owner of apartment 102 saw the wave coming and put his four-bedroom, 280-square-metre property on the market in December. He was initially asking 3.6 million yuan ($633,000), 50 per cent more than the selling price five years ago. But there were no takers, so he marked it down 11 per cent. Still, a buyer failed to emerge and, more than eight months after it went on the market, it remains unsold. "People are just waiting for the price to decline more so now's a good time to buy," says real estate agent Ouyang, reverting to her sales pitch. She's selling two similar apartments upstairs, which have also never been occupied and were bought by another speculator from Wenzhou. While this development is more than an hour from downtown Shanghai in traffic, it's a suburb not without prospects. Officially known as the Lingang New Town, it sits next to the Port of Shanghai, which overtook Singapore as the world's busiest in 2010. There are also three universities nearby and the newly created Shanghai Free Trade Zone, which promises to be a test bed for China's next phase of economic reform. It should make the area attractive to property investors, but like much of China the local economy has not caught up with the sheer number of apartments which have been built. "When these apartments were first put on the market [in 2009], they sold like cabbages [the Chinese equivalent of hotcakes]," says Ouyang. "But it's not so easy now."Massive over-construction Official data released on Wednesday showed residential property sales fell 17.9 per cent in July from a year ago. That has resulted in developers across the country holding 25 per cent more stock than they held at the same time last year. According to calculations made by Reuters, prices across China fell 0.9 per cent in July, but are still up 2.5 per cent over the year. Wang at UBS believes construction has outpaced real demand since 2003, and not by a small margin. On her figures, 2 million surplus dwellings were built in 2004, and this has grown every year since to reach nearly 9 million last year. All told, over the past decade Wang estimates there have been around 49 million surplus apartments built in China. She says the easing of government restrictions on property purchases will help at the edges, but that developers will need to adjust to a new normal over the coming years. "The ongoing property downturn is not just another cycle," she writes. It's a "structural imbalance". In 2009, property investment was growing by 40 per cent, but growth slowed to 13 per cent in July this year. That's sill an impressive number, but Wang's research suggests this is only exacerbating the problem of oversupply. She does not say by how much more she expects property investment to slow or if it will turn negative, but her numbers tell a very simple story. They show that easy credit, rampant speculation and the psychology of property as security fed the building boom. This has artificially inflated the demand for steel and its major input, iron ore, which sounds a warning for Australian raw material exporters. An unexpected driver of the property reversal is a different version of the story of China's urbanisation. The frenzy of housing construction over the past decade was partly driven by the huge flow of people from rural areas into the cities. The often-quoted World Bank figure is that a further 250 million people will become urban dwellers by 2030. But in recent years, the rate of urbanisation has been slowing. Wang attributes this to reforms in the household registration system, known as Hukou. In recent years, the government has focused on improving the lives of rural migrants who are already in urban areas, rather than physically relocating others. "This means Hukou reform can only be gradually implemented over the next few years, which means any resultant boost for property demand will likely be limited in the near term," Wang writes. These factors explain why real estate agent Ouyang is struggling to sell apartments in the Future City development. Developers and speculators envisaged that these "new areas" on the outskirts of many Chinese cities would become home to rural migrants. A 20-minute drive closer to the city, it's a similar story. Ghost townsWhile developers at the Fontainebleau gated community were not targeting migrant workers, they were hoping to entice families from the inner city looking for a larger home and garden. But those who bought properties on completion in 2005 are having similar trouble selling them. Real estate agent Li Wanwan says 30 per cent of the 280 free-standing houses and villas in the development have never been occupied over the past nine years. "They just bought them because they believed the price would go up," Li says. Renting them out was never an option. Indeed, Li can't even put a figure on what one of the 78 near identical free-standing houses, with their Georgian columns and cheap aluminium windows, might fetch in rent. "The owners worry that tenants would destroy the place or make it look ugly and it's harder to sell if it is being rented," he says. Not that it's proving an easy sell at present. Despite being just 3 kilometres from the soon-to-be-completed Shanghai Disneyland, his firm has had 30 properties in the development on the market since late last year. The asking price for a five-bedroom, 350-square-metre house is around 15 million yuan, three times what most sold for on completion in 2005. Li suggests that this price is "negotiable", but admits that even with such inducements, buyers are thin on the ground. It's a story being told by real estate agents across China and suggests that prices only have one way to go. But with 49 million empty apartments, the question is will the bubble identified by Wang deflate slowly – or will it simply burst? 49 million empty properties, or a 22.4 per cent vacancy rate, according to Gan Li at Texas A&M University Fairfax Media Management Pty Limited Document AFNR000020140822ea8n0000z
I seriously don't understand why the western medias always love to exaggerate and "magnified" China property problem? Is there a big bubble going to burst?
At least Aljazeera provide a more neutral reporting, which is inline with what I've read articles interviewing a few well known property magnate who have insight into China property. Chinese Property Correction
失信于民,何以取信于天下...
|
|
« Next Oldest | Next Newest »
|
Users browsing this thread: 19 Guest(s)