Touchring comment needed: Beijing Home Prices Fall 31.4% in one month

[c1ue]

http://www.capitalvue.com/home/CE-ne...3/post/1185337

May 11 -- The average transaction price of commercial residential properties in Beijing for the week ended May 9 fell 1,790 yuan per square meter or 9.6 percent week-on-week to 16,898 yuan per square meter, reports The Beijing News, citing statistics released by Beijing Real Estate Information Network.

Compared with the week ended April 11, the average transaction price of commercial residential properties in Beijing plunged 31.43 percent or 7,744 yuan per square meter.

In the last weeks of April, the transation volume of commercial residential properties in Beijing decreased by 10.34 percent, 11.39 percent and 30.82 percent respectively.

Average transaction price was flat at between 22,000 yuan to 23,000 yuan per square meter.

The share price of Poly Real Estate (600048) was down 2.65 percent to close at 10.66 yuan today.

The share price of Beijing Capital Development (600376) was down 4.16 percent to close at 13.26 yuan today.

[nicmakaveli]

Re: Touchring comment needed: Beijing Home Prices Fall 31.4% in one month

Thank u for sharing.
Beijing's pretty bad from what I've heard, I got a friend running a small company over there, people are slow buyers, but it's also time related, the spring summer months are usually very slow.
It's June, July in particular.
Not arguing against it, people are very reluctant to buy, and in Beijing, they've introduced property tax on a trial basis, I would think many are holding off, hoping for prices to drop and maybe the government to introduce more measures to reign in the explosive growth of the RE market here.
It's important to note that this is the average transaction price, there has been more supply in cheaper priced property and that not properties itself have dropped that much, in general in form of affordable housing as part of the stimulus program, Shanghai will get a few thousand of them too, in October after the expo.

Things start to kick off around october (september and november), they call it the golden and silver months in real estate among agents in China.

[touchring]

Re: Touchring comment needed: Beijing Home Prices Fall 31.4% in one month

When banks are instructed not to lend you a single cent for your third home purchase, it is only a matter of time before the market collapses. We have read news of copy cat kindergarten killings in China, but what they did not say is that many of the killings are related to land deals gone sour.

I think I know only as much as you, but we can learn something from the 2008 crash.

From what I have read, in 2008, when the market started to fall, some small builders will offer steep discounts of 20-30% to lure in bargain hunters, collect the deposit cash from buyers and flee with the money, abandoning creditors, projects and even their builder business.

This is somewhat similar to factory owners secretly selling off their bank financed factory equipment, burn the company financial records to erase evidence, and then flee town in the night, leaving staff locked out of their offices and factories in the morning, wages unpaid and creditors in a lurch.

There's a Chinese saying, 留得青山在，不愁没柴烧, which translates to 'As long as the green mountains are there, one need not worry about firewood. '. Meaning with capital cached somewhere, they can start a business elsewhere, if not in another city in China, even abroad.

The last strategy of the 36 Stratagems comes into play.

http://en.wikipedia.org/wiki/Thirty-Six_Stratagems

If everything else fails, retreat (走為上／走为上, Zǒu wéi shàng)

If it becomes obvious that your current course of action will lead to defeat, then retreat and regroup. When your side is losing, there are only three choices remaining: surrender, compromise, or escape. Surrender is complete defeat, compromise is half defeat, but escape is not defeat. As long as you are not defeated, you still have a chance.

Asian cultures differ, unlike the Japanese, the Chinese don't fight to the death, in fact, they won't even fight in the first place if they see the situation is to their disadvantage, the first idea will be to escape. The good thing is that because many capitalists have escaped, they will come back again as soon as the market has settled. With capital on hand and money talks, no one remembers what happened in the past.

[c1ue]

Re: Touchring comment needed: Beijing Home Prices Fall 31.4% in one month

Touchring,

Nothing you are saying above is indicating that was was/is happening in China is anything but a bubble.

[touchring]

Re: Touchring comment needed: Beijing Home Prices Fall 31.4% in one month

I thought that it goes without saying that China is having a real estate bubble.

What I'm trying to say is this bubble will not have a nice ending, it very end very abruptly, there won't be any pretense. Everyone who has bought into the market knows that this is a casino, so prices will probably plunge faster than it rose - not withstanding the fact that it rose like 100% within 12 months. Do the math.

[metalman]

Re: Touchring comment needed: Beijing Home Prices Fall 31.4% in one month

The good thing is that because many capitalists have escaped, they will come back again as soon as the market has settled. With capital on hand and money talks, no one remembers what happened in the past.

you are describing america.

[touchring]

Re: Touchring comment needed: Beijing Home Prices Fall 31.4% in one month

Thank u for sharing.
Beijing's pretty bad from what I've heard, I got a friend running a small company over there, people are slow buyers, but it's also time related, the spring summer months are usually very slow.
It's June, July in particular.
Not arguing against it, people are very reluctant to buy, and in Beijing, they've introduced property tax on a trial basis, I would think many are holding off, hoping for prices to drop and maybe the government to introduce more measures to reign in the explosive growth of the RE market here.
It's important to note that this is the average transaction price, there has been more supply in cheaper priced property and that not properties itself have dropped that much, in general in form of affordable housing as part of the stimulus program, Shanghai will get a few thousand of them too, in October after the expo.

Things start to kick off around october (september and november), they call it the golden and silver months in real estate among agents in China.

There's an article about this - http://www.chinadaily.com.cn/cndy/20...nt_9842877.htm

There are many ways to curb prices such as a transactions tax, e.g. a 10% tax on the gross sale price and the tax must not be paid using a mortgage and has to be paid right after the purchase, before the apartment is built - this has always proven to work!

So I find it weird that the Chinese government has to resort to license restrictions to lower transaction prices.

[big67]

Re: Touchring comment needed: Beijing Home Prices Fall 31.4% in one month

Hi Touchring
there are some comments on the net that point to chinese people to switch from RE to gold. Do you think this is acceptable from a cultural and political point of view for the chinese people, or is this just a projection ingenerated by the western culture?

[touchring]

Re: Touchring comment needed: Beijing Home Prices Fall 31.4% in one month

Hi Touchring
there are some comments on the net that point to chinese people to switch from RE to gold. Do you think this is acceptable from a cultural and political point of view for the chinese people, or is this just a projection ingenerated by the western culture?

Thanks, I think gold is valued by almost all cultures although with varying extent. Fashion wise, the younger Chinese women prefer platinum and diamonds.