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Showing posts with label global real estate collapse. Show all posts
Showing posts with label global real estate collapse. Show all posts
BEIJING (MNI) - Prices of new homes in China's capital plunged 26.7% month-on-month in March, the Beijing News reported Tuesday, citing data from the city's Housing and Urban-Rural Development Commission.
Average prices of newly-built houses in March fell 10.9% over the same month last year to CNY19,679 per square meter, marking the first year-on-year decline since September 2009.
Home purchases fell 50.9% y/y and 41.5% m/m, the newspaper said, citing an unidentified official from the Housing Commission as saying the falls point to the government's crackdown on speculation in the real estate market.
Beijing property prices rose 0.4% m/m in February, 0.8% in January and 0.2% in December, according to National Bureau of Statistics data.
The central government has launched several rounds of measures since last year designed to cool the housing market, though local government reliance on land sales to plug fiscal holes mean enforcement hasn't been uniform.
The NBS is expected to release March house price data on April 18.
And this is the part of the story that begins to tell the actual story...
No one should be surprised by this other than the Chinese government that will NOT like this report being leaked early.
I suppose it can be considered a prelude to a prelude in that sense.
China continues to grow rapidly, though through government sponsored construction projects.
China is living on the Field of Dream Theory of 'Build it and they will Come.'
'They' being buyers. 'It' being massive skyscrapers only elitist speculators can afford.
China has 2 major problems:
Oversupply and continuous building based on 'expectations' of future growth, and;
No organic owner-occupant buyers due to rampant over valuation due to speculation
When China's bubble bursts, they may have buyers, but the prices will have to fall to near zero for the majority of working Chinese to afford to occupy these new housing units. When will this happen?
It is happening now-- slowly, but surely.
China lending down and rates rising. Money supply continues to rise but at a much slower rate than previous. This should continue as China raises rates and reserve requirements to try and fight off food and energy inflation.
Grab the Popcorn:
Here is a great, yet lengthy, video on China's property bubble. It is well worth your time today.
Housing prices are indeed out of control in China...
According to a survey by the Taiwan Real Estate Research Center released last month, housing prices in Taipei city have soared 73 percent over the past five years, but average household income has risen by only 1.2 percent.
Everything is sunshine and cookies however..for now, that is...
Build it and They Will Come... if they don't come, build more and GDP will follow.
If nothing else, the fire sale that follows the bust will be amazing!
Unless of course the bear is already out of hibernation
Grrrrrr.....
I love listening to the financial world during times of chaos. Everything has a silver lining:
Goldman says little impact from a Japan disaster on the US.
Kudlow was talking today about how great the markets performed over the last few days as if the S&P was his youngest kid and the chaos from all areas was a pee-wee baseball game.
I am really starting to see a glass that is half empty at this point, and it is NOT just because of Japan.
First and foremost, Japan is in trouble. The Bank of Japan is printing money like no tomorrow to keep the panic controlled and the nuclear issues, which may be a little exaggerated, are not going away when (or if) they get the reactors online. The effects of the quake, tsunami and nuclear disaster will plague Japan for a long time and will most likely send the country into a very deep recession. Why-- same reasons why recessions always happen-- real estate, energy and unrest. Real estate will crash in this area of Japan. Energy is a gimmie here. Unrest will come from the displacement of Japanese who are laid off, living in poor conditions or who have experienced loss.
I say Japan is just the icing on the cake. The majority of the world was already falling back into near recession, so why not have a MAJOR event to kick off the party? I'll bring the keg.
It's still just about real estate
I am pretty sure we are starting to see cracks of the next real estate bust-- they are 100% apparent here at home in the US (no need for another link on US real estate sucking wind-- you know the situation), but may parts of the world have been stimulating their economies through the last recession with the same deadly drugs Greenspan et al used to bring on the recession-- easy credit for real estate.
Here is a great video from Mike Maloney in front of a DEAD 9 building super complex in Russia that I can only imagine was set to cost many but-zillion rubles. While I don't see eye to eye on Mike's 'gold to 15,000' views, his real estate predictions are very spot on based on excessive lending without demand.
Real estate is predictable, but every boom is followed by the 'it is different this time' crap. The crap is about to hit the fan and the result will be the same-- loss of wealth, restricted credit and massive job losses that leads to the 'unforseen' recession.
I recall an article in 2005 declaring the new state bird of Florida was the building crane. Funny really-- the pun and the irony of that declaration (ironic as many cranes are endangered species).
If you think it is different this time in Australia, Canada, China and Brazil, please read a great Bloomberg piece on Miami in 2007-- Miami Article Bloomberg
The oversupply will force prices down as much as 30 percent, the worst decline since the 1970s, and help push Florida's economy into recession as early as October, said Mark Zandi, chief economist at West Chester, Pennsylvania-based Moody's Economy.com, who owns a home in Vero Beach, Florida.
I'm sure someone called Mr. Zandi high in 2007...
They were correct-- Miami's condo prices fell closer to 50%-60% when the market crashed.
Real estate is the real reason the next bear starts. When real estate crashes, jobs are lost in numbers that make your head spin and commodities follow on the way down.
Pick your poison...
I'll take Australia melting before your eyes in conjunction with Hong Kong that results in a consumer spending halt for 500 points off the S&P, Alex.
Japan may have a nuclear disaster, but the global real estate meltdown is just beginning.
