China - Housing 01 (May 08 - May 10)

[kennynah]

[millionairemind]

Published April 23, 2010

Property stocks hit as tax trial gets go-ahead

Citigroup forecasts home prices may fall 20% by year-end

(SHANGHAI) China's property stocks fell to the lowest levels in more than a year after the Economic Observer said the State Council has approved a real-estate tax trial in four cities. And Citigroup forecast prices may drop 20 per cent.
Turning point: Guangzhou had 804 cancellations for home purchases on April 19, the highest on record

China Vanke Co, the biggest developer, slid 2.6 per cent to close at 7.90 yuan, extending its decline this year to 27 per cent. A gauge of property stocks in the Shanghai Composite Index retreated 1.8 per cent to its lowest since April 8, 2009.

The trial will start in Beijing, Chongqing, and Shenzhen and then in Shanghai following the World Expo, the report said, citing an unidentified person.

A 'turning point' in the China property market is 'unavoidable,' Citigroup analysts Oscar Choi and Marco Sze wrote in a report yesterday.

'Investors are worried about a worst-case scenario for property companies along with banks on the government's crackdown,' said Wei Wei, an analyst at West China Securities Co in Shanghai.


China has introduced 'the most draconian' measures in the past week, according to Deutsche Bank AG's Greater China chief economist Jun Ma, after earlier steps including raising the amount of bank reserves failed to prevent a record surge in property prices in March.

Hedge fund manager James Chanos said China is 'on a treadmill to hell' and that the real estate is a bubble that may burst as early as this year.

The property bubble could hurt social as well as financial stability and must be deflated if the country is to urbanise and develop a healthy economy, the China Securities Journal said in an editorial yesterday.

The implementation of a property tax is 'inevitable,' the only question is when and where, Michael Klibaner, head of research at Jones Lang LaSalle Inc, said in Shanghai yesterday.

Citigroup analysts predicted home prices may fall as much as a fifth from current levels by the end of the year, as tightening measures and increased land supply take effect.

The southern city of Guangzhou had 804 cancellations for home purchases on April 19, the highest on record, China Business News reported, citing the Guangzhou Municipal Land Resources and Housing Administrative Bureau.

The housing ministry vowed on April 20 to punish developers that 'artificially' create supply shortages and ordered builders not to take deposits for sales of uncompleted apartments without proper approval.

The central bank last week raised mortgage rates, increased down payments for home purchases and ordered banks to restrict loans for buyers of three or more homes. State-owned companies were ordered by the government in March to pull out of property development if it's not their main business.

Demand for housing in China will withstand government bank lending curbs, and further declines in the nation's property stocks may be an opportunity to buy the shares, Templeton Asset Management's Mark Mobius said this week.

Alpha Investment Partners, a unit of Singapore developer Keppel Land, is looking to invest in Chinese property as it bets on 'real demand' to hold up, managing director Loh Chin Hua said in Singapore on Wednesday.

Shanghai New Huangpu Real Estate Co slumped 4.7 per cent to 13.11 yuan yesterday, extending a loss this week to 21 per cent. Greentown China Holdings, which develops villas, slid 2.4 per cent to HK$8.47 in Hong Kong, a 12th day of declines. -- Bloomberg

[kennynah]

burst liao or not? so many articles over so many months..and still...all talk and property prices still going up

[mojo_]

China's maids and sales girls are snapping up properties...

Commentary by Andy Xie

April 26 (Bloomberg) -- “My maid just asked for leave,” a friend in Beijing told me recently. “She’s rushing home to buy property. I suggested she borrow 70 percent, so she could cap the loss.”

It wasn’t the first time I had heard such a story in China. Some friends in Shanghai have told me similar ones. It seems all the housemaids are rushing into the market at the same time.

There are benefits to housekeeping for fund managers. China’s housemaids may be Asia’s answer to the shoeshine boy whose stock tips prompted Joseph Kennedy to sell his shares before the Wall Street Crash of 1929.

Another friend recently vacationed in the southern island- resort city of Sanya in Hainan province and felt compelled to visit a development sales office. Everyone she knew had bought there already. It’s either buy or be unsocial.

“You should buy two,” the sharp sales girl suggested. “In three years, the price will have doubled. You could sell one and get one free.”

How could anyone resist an offer like that?

http://www.bloomberg.com/apps/news?pid= ... _pX0pJa_d8

ps: maybe they're buying our hdb too?

[kennynah]

but first they need to be PR...which means they need first look for a "husband" here...

[millionairemind]

April 28, 2010, 3.14 pm (Singapore time)

China's property moves cool demand: analysts

BEIJING - China's moves to rein in soaring real estate prices appear to be cooling demand in the red-hot sector, reducing the risk of the market overheating and derailing the booming economy, analysts say.

In the past two weeks, the government has introduced a range of measures aimed at curbing rampant speculation and spiralling prices, but analysts warn the rules can be skirted easily by buyers looking to make a fast buck.

'The overall effect of these rules is to send a clear signal - the State Council (cabinet) is serious about deflating the housing bubble,' said Stephen Green, head of China research at Standard Chartered Bank.

'By pricking a land and property bubble in several major cities, the State Council has decided to endure some short-term pain for long-term gain.'

Beijing has tightened restrictions on advance sales of new property developments, introduced new curbs on loans for third home purchases and raised minimum downpayments for second homes.

Banking regulators have also ordered lenders to conduct quarterly stress tests on mortgages as the government seeks to clamp down on bad loans.

This week, state media said China was likely to introduce a property tax on residential housing in the first half of the year on a trial basis in Beijing, Shanghai, the southwestern area of Chongqing and the southern city of Shenzhen.

The moves highlight the growing concern in China about the threat of rising bad debts from a US-style property bubble, which authorities fear could derail the rapid-fire growth of the world's third-largest economy.

'The government is sending out signals that it is not going to keep this party going and that has made people more cautious,' said Patrick Chovanec, an economics professor at Tsinghua University.

Prices in major cities rose 11.7 per cent year-on-year last month, the fastest pace since a nationwide survey was widened to 70 cities in July 2005, official data show.

At the Beijing Real Estate Expo earlier this month, the average price of a new apartment in the Chinese capital was 21,164 yuan (US$3,100) per square metre, double that of last year, state media said.

That means a 90-square-metre apartment in Beijing would cost 1.9 million yuan, compared with the average per capita income of 17,175 yuan in 2009.

The cooling measures appear to have spooked speculators and property developers, said Mr Green, citing reports that demand for flats has fallen across the country while developers in Beijing have cut prices by 5 to 10 per cent.

But he warned the rules contained apparent loopholes that could be exploited by speculators.

China lacks a nationwide database on property sales, which means banks have no way of checking if mortgage applicants already own apartments in other cities.

And higher downpayments will have little impact on speculators who mostly pay the full value of properties in cash.

'In other words, if you own five apartments around the country but bought them all for cash, the bank has no way of knowing this,' said Mr Green.

Analysts at Citigroup say they expect prices to start falling as early as May, as the measures dampen speculative demand and new property developments come onto the market later this year.

But they too are cautious, warning that the lack of investment options in China could result in a return to higher prices next year.

'Structural problems such as low to negative real interest rates, lack of channels to protect wealth and savings for households from inflation would again encourage speculation,' they said in a research note.

Mr Chovanec warned the measures aimed at curbing speculative activity could miss their target because about 50 per cent of residential purchases were paid for in cash.

'Most of the people paying cash are buying their second, third, fourth or fifth unit to hold idle as a place to stash their cash,' he said.

A holding tax on vacant properties and increased investment options for Chinese people would be more effective in curbing prices, Mr Chovanec said. -- AFP

[winston]

Beijing limits home-buyers to one new apartment

The Chinese capital Beijing has issued rules limiting families to one new apartment purchase as authorities try to rein in rampant property speculation and soaring prices, state media said Friday.

"For the time being, one family can buy only one new home in the city," China News Service said, citing the municipal government.

Beijing authorities also ordered banks to refuse home loans to people who cannot prove they have paid taxes and made social security contributions in the city for at least one year, the report said.

Banks also have been told to block mortgage applications for people buying their third property, but it was not clear in the report whether this would affect only residents in the capital or others as well.

The rules marked the latest in a series of measures by Chinese authorities as they seek to reduce the risk of the red-hot property market overheating and derailing the world's third largest economy.

Prices in major cities rose 11.7 percent year-on-year last month, the fastest pace since a nationwide survey was widened to 70 cities in July 2005, official data show.

At the Beijing Real Estate Expo earlier this month, the average price of a new apartment in the Chinese capital was 21,164 yuan (3,100 dollars) per square metre, double that of last year, state media said.

That means a 90-square-metre (970 square feet) apartment in Beijing would cost 1.9 million yuan, compared with the average per capita income of 17,175 yuan in 2009.

Beijing's government pledged to step up efforts to reclaim land left idle by property developers to combat land hoarding and make the space available for "ordinary housing".

Authorities also will investigate property developments charging excessively high prices.

In the past two weeks, China has tightened restrictions nationwide on advance sales of new property developments, introduced new curbs on loans for third home purchases and raised minimum down-payments for second homes.

Banking regulators have also told lenders to conduct quarterly stress tests on mortgages as the government seeks to clamp down on bad loans.

This week, state media said China was likely to introduce a property tax on residential housing in the first half of the year on a trial basis in Beijing, Shanghai, southwestern Chongqing and the southern city of Shenzhen.

The moves highlight growing concern in China about a possible rise in bad debts tripping up the rapid growth of the economy, as happened in the United States.

But analysts have warned the rules contained apparent loopholes that could be exploited by speculators.

China lacks a nationwide database on property sales, which means banks have no way of checking if mortgage applicants already own apartments in other cities.

And higher down-payments will have little impact on speculators who mostly pay the full value of properties in cash.

Source: AFP Global Edition

[millionairemind]

Published May 7, 2010

PROPERTY MARKET
China home prices set to slide on govt curbs

Local authorities implement measures to crack down on property speculation to avert asset bubble

(BEIJING) China's home prices may slump 30 per cent as local authorities implement government measures to crack down on property speculation, according to brokerages including China Jianyin Investment Securities Co.
Cooling property fever: Home prices in first-tier cities could drop by 30% and commercial residential by 20%, according to an analyst. But others say widespread price cuts by developers for new homes are unlikely

Home sales plunged nearly 40 per cent by both units and floor space in 15 major cities last week, extending a streak of declines since mid-April, according to Zheshang Securities Co. China on May 2 raised banks' reserve requirements for the third time this year, adding to last month's down-payment and interest rate increases on second mortgages.

The government is escalating efforts to avert asset bubbles after a record surge in property prices. Beijing has gone further, limiting residents in the capital to buying one new home starting this month, the first city to implement a restriction authorised by the central government.

'Austerity has taken the main tone in implementing the tightening policies, and Beijing's property measures are likely to be followed by other cities,' said Yang Qingli, a Beijing- based analyst at Bocom International Ltd. 'The extent of sales contraction will exceed what we anticipated, and the pace of home price declines will be faster than expected.'

Home prices in first-tier cities will drop by 30 per cent and commercial residential by 20 per cent, according to China Jianyin analyst Xing Weiwei. Shenyin Wanguo Research & Consulting Co analyst Kris Li said a 20 per cent drop without the introduction of a property tax, and a 30 per cent decline with the tax, will be reasonable following declines in volume.

China is 'very likely' to test a property tax this year, China Business News said on April 28, citing Gu Yunchang, a vice-chairman at the China Real Estate Research Association.

China is likely to reverse the tightening policies because they will put the nation's 8 per cent economic growth target for this year at risk, according to Macquarie Securities Ltd. Such changes could happen in the fourth quarter, when the government has evidence that the market has cooled, the brokerage's Hong Kong- based economist Paul Cavey said in a report on Wednesday.

The State Council on April 15 announced measures including a 50 per cent down payment and 1.1 times benchmark rate on second homes, and a ban on third mortgages. Property prices in 70 cities surged a record 11.7 per cent in March, defying a Jan 10 directive that ordered quickened construction of affordable housing and 'strict' second-mortgage policies.

'This time it seems measures adopted by local governments are more harsh than required' as the government made it clear that local officials will be held responsible for failing to curb home prices, said Shanghai-based Mr Li at Shenyin Wanguo.

In Beijing, average contracts signed dropped by 82 per cent from April to 211 units per day in the first two days of May, Bocom International analyst Toni Ho Chi Chung said in a May 5 report, citing government data. The Chinese capital last week ordered developers to start selling uncompleted apartments within three days of pre-sale approval, compared with a 10-day requirement imposed by the housing ministry to quicken supply.

'The wait-and-see atmosphere among buyers has grown very dense,' Zhang Kunyu, general manager of investment consulting at Centaline Property Agency Ltd's Beijing branch, said. Besides hefty declines in sales and a 'more obvious' drop in second-hand homes, some new projects have also started to cut prices, she added, without being specific.

Still, widespread price cuts for new homes are unlikely to take place soon, as it's 'obviously not wise' for developers to seek an unguaranteed boost to sales by sacrificing profit margins, according to a Sealand Securities Co report on April 29.

'Prices could stay sticky until September or October, when developers decide to accelerate sales, and potentially cut prices' as supplies increase in the second half, the Mirae Asset analysts said.

Developers found to delay home sales to speculate on further price gains or hoard land will be barred from share sales, 'major asset restructurings,' or bank borrowing, the State Council said on April 15. Five days later, the government ordered developers not to take deposits for sales of uncompleted apartments without proper approval and barred them from charging 'abnormally high' prices.

The government plans to restrict the use of pre-sale proceeds to the construction of related projects until their completion, the China Securities Journal reported yesterday without saying where it got the information. The move will put 'huge pressure' on developers' finances and prevent them from using the funds to buy land at high prices, the report said, citing Soho China Ltd chairman Pan Shiyi.

'My understanding of the policy is housing prices must come down, and prices need to go back to levels before mid-2009,' China Jianyin said in an April 29 report, citing Li Wenjie, a member of a State Council experts panel on property market controls. Mr Li is also North China head of Centaline.

The average price of new apartments in Shenzhen surged by 86.4 per cent from a year earlier in March, Xinhua reported on April 1, citing government data. Contracted sales in the southern city last week dropped 42 per cent from the preceding seven days and were 80 per cent down from 2009's average, according to Changjiang Securities Co. -- Bloomberg

[LenaHuat]

Hengda is giving a 15% discount for all their properties nation-wide. Last nite, I thought James Chanos said "50%" and quickly cross-checked the Chinese websites. It's 15%.

Soho China's Zhang Xin was on ifeng TV last nite and she said that the top Chinese property companies are cash-rich and so have holding power. Is she posturing? No idea. But she let out that both her husband and her are now Bahai worshippers Not so long ago, they were Buddhists.
Are they both Bahai and Buddhist? Any1 knows?

[millionairemind]

If at first you don't succeed, try again

China April Home Prices Defy Curbs With Record Jump (Update1)
Share Business ExchangeTwitterFacebook| Email | Print | A A A
By Chia-Peck Wong


May 11 (Bloomberg) -- China’s property prices rose a record in April, defying government measures to stem gains and suggesting more drastic curbs are needed.

Residential and commercial real-estate prices in 70 cities climbed 12.8 percent from a year earlier, the National Bureau of Statistics said on its website. That topped the 11.7 percent surge in March, which was a record then for the data series that goes back to 2005. Still, prices may start falling this month as the government’s measures to cool the market take effect, said analysts including Yang Qingli at BOCOM International Ltd.

“The only reason why April posted a gain was the low basis of comparison from last year,” Beijing-based Yang said before the data was announced. The government’s cooling policies have “just begun to affect the market. Prices will definitely drop this year, by between 10 percent and 20 percent.”

More cities are likely to restrict buying, Yang added. Beijing is the first city to limit residents to purchasing one new home starting this month. In April 2009, prices fell 1.1 percent.

China, trying to peel back the effects of a $586 billion stimulus package and lending binge that drove a surge in home prices, is stepping up efforts to cool the market with policies Deutsche Bank AG described as “draconian.” It ordered developers not to take deposits for sales of uncompleted flats without proper approval, curbed loans for third-home purchases, and on May 2 boosted banks’ minimum reserve requirement for the third time this year.

“Overall, prices are likely to have peaked and will soften because of the policies,” Wang Ren, a Hong Kong-based analyst at CCB International Co., said before the data was announced.

Developers including Guangzhou R&F Properties Co. and China Overseas Land & Investment Ltd. have already reported slowing sales in April.