Premier Wen Jiabao pledged further measures to curb speculation in China's housing market Friday, signaling that lending to the sector would be tightened as well as the imposition of targeted taxes and stricter enforcement of real estate laws.If the decline of America's housing bubble brought down the world economy, what might a decline of China's housing bubble do?
"We will rein in speculative housing purchases by intensifying the implementation of differentiated credit and tax policies," Wen said in his report to the annual National People's Congress in Beijing.
The government would work to improve management of land to prevent "prices from rising too fast" along with making "greater efforts" to tackle illegal land hoarding and property-price manipulation, he said.
The speech marked a step-up in Wen's rhetoric since he warned of rising property prices in December. ...
Indeed, many economists believe China's property market is inflating at a dangerously fast pace.
Prices of new homes in the urban Beijing and Shanghai areas gained by 68% and 66%, respectively, in November from a year earlier, while research by Standard Chartered in January said land prices nationwide more than doubled during 2009.
Friday, March 05, 2010
A housing bubble in China?
Apparently, China may have its own housing bubble:
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"Zelman is bullish on the development-friendly Virginia side of the Washington, D.C. market, less so on the Maryland side. She recently released a report on D.C. saying its “fundamentals are among the best in the country. It is well positioned for sustainable recovery given incremental job growth and land constraints.”
ReplyDeletehttp://www.builderonline.com/local-markets/first-housing-markets-to-recover.aspx?printerfriendly=true
An interesting comment given the source is Ivy Zelman. Zelman is most famous for creating the infamous "Credit Suisse Alt A reset chart". According to her, NOVA is in the clear, but MD still has (or at least had) a ways to go.
I didnt know Zelman made that chart. I just thought she was famous for attending a 2006 Toll Bros shareholder meeting and asking a uberbullish Bob Toll point blank "what sort of Kool Aid are you drinking".
ReplyDeleteFreaking Hilarious!!!
James and David:
ReplyDeleteI'm working on a story for Washingtonian magazine about the real estate boom/bust. It's an oral history, so the story told through the voices of real estate agents, buyers, sellers, community leaders, analysts, etc. I'm hoping you'll both be willing to talk about the blog and what you witnessed during the last five-seven years.
You can reach me at ebwills at yahoo dot com.
Thanks and best,
Eric Wills
I believe Chinese tend to buy with far less lending. This may no longer be true, but I think in the past most homes were basically bought outright with cash. This would probably limit the rippled effect which occurred in other bubble economies where mortgage defaults let to MBS defaults led to CDS defaults led to massive bailouts. Instead there will just be lotsa chinese who paid way to much for their homes.
ReplyDeleteEric Wills said...
ReplyDelete"I'm hoping you'll both be willing to talk about the blog and what you witnessed during the last five-seven years."
Hmmm. Why only the last five to seven years? This real estate cycle began in 1998. See graph.
That's exactly why it would be good for you to talk to him, if he's actually a legit reporter and not some esoteric scammer. Even after everything that's happened very few people have an understanding of what happened let alone when/how it happened. Throw down some blogosphere truth for the dude.
ReplyDeleteHmmm. Why only the last five to seven years? This real estate cycle began in 1998.
ReplyDeleteMaybe he is just referring to the time of the existence of this blog. Isnt it 5 or 6 years now?
Also, James, maybe you should consider updating some of the language on your graph to reflect the fact that the US has largely corrected (i.e. its no longer accurate to say "it has a long way to fall").
I love that graph.....ding dong, ding dong
ReplyDeleteMe too! Look at that blue line and how close to done we were when the bounce started.
ReplyDeleteBy the time the bounce wears off, I wonder how much higher that blue line will be then!
uh, dude, it is called a dead cat bounce......
ReplyDeleteIm talking about the ligher colored "nominal pre-bubble trend" blue line which continues to move up over time, preventing bell curves from further completing...
ReplyDeleteThe difference between China and the US is that China issues its own currency, and is not dependent on private financiers who own a central bank to charge them high interest on their own currency. No manipulated inflation or deflation for banker profit and power-gain, in other words.
ReplyDeleteThis means China has full control over their own economy. There will be no China collapse of any kind.
Remember that central banker David Rockefeller loves China's economic model. Such an irony, right? Well Rockefeller and other central bankers realized they wanted to join with the govts they lend to, and then run them in a communist fashion similar to China... this is where the UN comes in...
ReplyDeleteChina is indeed in MUCH worse shape than most are ready to imagine. 40 to 50 years of overstated growth figures from a central planning authority not unlike the Sovet Union's likely leads to similar effects as under the Soviets, wouldn't it? There will be much more hardship soon with a looming Chinese collapse bigger than the Soviet Union's.
ReplyDeleteThornton said...
ReplyDeleteAlso, James, maybe you should consider updating some of the language on your graph to reflect the fact that the US has largely corrected (i.e. its no longer accurate to say "it has a long way to fall").
Actually, the text at the top of my web page is only there for search engines to find keywords.
Sorry but it is impossible that China's economy will collapse in any way. The influence of the UN's economic arms -- the IMF and the World Bank -- does not reach into China. The only influence they have with China is the manipulated perception within Western media, which is being used extensively. The only economic collapses happening in the world are due to UN/IMF influence, and rarely anything else.
ReplyDeleteJames:
ReplyDeleteWith my reference to five to seven years I was indeed referring to the time you've had the blog. I moved to DC in 2000, and I'm all too familiar with the chart. Many of us lived the chart in one way or another. Of course we can talk about the entire cycle. ebwills at yahoo dot com if you're interested.
Thanks,
Eric
via calculatedriskblog today:
ReplyDelete"The majority of homes in China are purchased with down payments between 30-40%, which is required by the banks, and nearly 25% of homes are purchased with all cash.... the large downpayments should cushion in spillover if prices do decline."
This was part of a long post from a friend of his who lives in Shanghai who seems to think there is not currently a housing bubble in China.
Hi dear, what does "A housing bubble in China" really mean?
ReplyDelete