Thursday, February 12, 2015 8:59:29 PM
Offshore investment is booming in major financial centers around the world. I know we know this i just wondered if the Chinese domestic real estate situation
had much to do with their jumping in overseas. Could be for Russians and other buying up, too. This first one is simply for the numbers included below.
Offshore investment is also thriving, as Australian property is seen internationally as a safe place to park money. Credit Suisse says Chinese
buyers have snapped up $24 billion worth of Australian housing in the past seven years and will spend another $44 billion in the next seven years.
http://www.afrsmartinvestor.com.au/p/property/how_to_make_money_off_the_plan_BZEi4pHMH4MFvUEa8uX8yN
Canada stands out as a country that does not collect data on the situation.
Foreigners Are Taking Over Canadian Real Estate
Definitely
Maybe
Posted: 08/28/2014 10:30 am EDT Updated: 09/11/2014 9:59 am EDT
The housing market is so inflated that the international community warns of a bubble ready to burst and locals fret that soaring prices have pushed the dream of home ownership forever out of reach.
Some weary house hunters have turned wary as reports circulate about an influx of wealthy foreign buyers, particularly from China, buying up the housing stock.
This isn’t Vancouver. Or Toronto. Or anywhere in Canada.
This is the scene in Sydney and cities across Australia where, similar to Canada, low interest rates have sparked a years-long rush into the market amid cries of overvaluation and deteriorating affordability.
Outrage from a public keenly aware of the allure of Australia’s stable economy for their Pacific Rim neighbours spurred the government to clamp down on foreign investment in the real estate market. In 2010, the Australians reinstated an old policy that largely restricts foreigners to investing in new developments only.
Data suggests those rules have helped channel foreign investment into new, large-scale developments, increasing Australia’s overall housing supply and potentially easing upward pressure on prices of existing homes. Or at least that’s the hope.
Still, the spectre of foreign competition figures into the national conversation about home affordability, even as statistics from the Real Estate Institute of Australia suggest the proportion of foreign investment in Australia’s overall housing stock is relatively small.
That’s the key difference between the similar housing markets of Australia and Canada — statistics.
Canada doesn’t collect the kind of data on foreign investment kept by Australia, the U.S., and a host of countries around the world.
And so, nervous market observers are left speculating about whether unprecedented levels of investment — foreign and otherwise — are driving up home prices in major cities, or if foreign buyers are playing scapegoat for a hot real estate market driven by other factors.
.. more, with a bottom video which mentions NY and stars Vancouver ..
http://www.huffingtonpost.ca/2014/08/27/foreign-real-estate-ownership-canada_n_5718705.html
We all have read of Chinese 'ghost cities'. Two here.
And Now Presenting: Amazing Satellite Images Of The Ghost Cities Of China
http://www.businessinsider.com/pictures-chinese-ghost-cities-2010-12?slop=1
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=57918022
In China, political pressure for full employment has led to similar late-stage growth obesity. In 2005, China built the largest shopping mall in the
world, the New South China Mall: Today it’s 99 percent vacant. China also built up a lavish district in a city called Ordos: Today, it’s a ghost town.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=48065063
?? thought we had more on Tornado Alley, but others if they exist are .. lol .. too ghosty for me.
Obviously, other than the fact that foreign investment in real estate helps to make it impossible for too many home-grown
citizens to buy in places they have grown up, one other reason for concern could be a Chinese real estate bubble burst.
Is Canadian Real Estate in trouble, Vancouver real estate bubble and China's real-estate bubble
In that video the top home builder in the world, he is Chinese, says the real estate situation in China is "dangerous".
So that is my link to your post. On reading it i wondered if one of the reasons Chinese particularly were investing
so heavily in overseas real estate was due to their own domestic concerns. Parts of this one suggest it is.
China real estate: A bubble bursting?
Dhara Ranasinghe | Special to CNBC.com
Sunday, 31 Aug 2014 | 6:42 PM ETCNBC.com
Buena Vista Images | Photographer's Choice | Getty Images
For 31-year old Beijing resident Wang Yuanzhi, talk about a bubble in Chinese property is not something to be too concerned about.
"If you look at the real estate market in China, it has already seen a golden decade of extreme fast growth. There will still be room for growth in this market, even in the next 10 to 20 years," said Wang, who bought a home under construction last December. "The whole housing bubble is a fear; it is a concentration on the risks that the real estate market faces."
Underlying confidence expressed by residents such as Wang may be what China's authorities hope will aid a recovery in a market that has seen prices fall for three straight months.
Read More > Chinese home buyers play the waiting game - http://www.cnbc.com/id/101919144
For other observers a downturn in China's once red-hot property market poses one of the greatest threats to the economy, the world's second biggest.
"The risks and exposure to property don't look the same as in the U.S. subprime [mortgage crisis], but new bubbles never look exactly like the last bubble (otherwise they'd be easy to recognize)," said Patrick Chovanec, chief strategist at Silvercrest Asset Management .. http://data.cnbc.com/quotes/SAMG .
"The exposure of China's banks (and now shadow banks) to real estate may look different than it did in the U.S., but it's very real. The main exposure is the reliance on property as collateral to support virtually all forms of lending throughout the economy, a situation that is very similar to Japan in the 1980s," he added, referring to a collapse in Japan's property market after a boom.
Read More > Unsold land in China signals developer uncertainty - http://www.cnbc.com/id/101897361
The importance of China's property market cannot be underestimated—it accounts for roughly 15 percent of gross domestic product and directly affects other sectors such as banking and construction.
Systemic risk?
To contain a boom in China's housing market and keep prices affordable, Beijing imposed restrictions over the past five years. Those measures together with a slowing economy now appear to be having an impact.
Average new home prices in 70 major Chinese cities fell 0.9 percent in July on month, following a 0.5 percent decline in June, and the question now is just how protracted the slowdown will be.
Read More > Are China's property vacancies a danger sign? - http://www.cnbc.com/id/101756254
"The real estate market has been the downfall of many major economies in the past—the U.S., Japan," said Dariusz Kowalczyk, a senior economist at Credit Agricole .. http://data.cnbc.com/quotes/ACA-FR . "So the worst case scenario for China's housing market is an economic crisis."
In China's case, credit expansion drives the housing market and when that slows it has a direct impact on real estate, say economists.
They point out that since 2008, China's money supply expanded by more than threefold and a lot of that money had gone into real estate. Latest data shows that the amount of money flowing into China's economy slowed to its lowest level in six years in July.
[ EMBEDDED VIDEO: .. heh, surprise this gentlemen seems to have little concern ..
Chinese policy 'successful' for real estate: Pro
Tuesday, 19 Aug 2014 | 4:15 AM ET
Michael Klibaner, regional director and head of research for Greater China at JLL,
comments on the Chinese residential real estate market and says developers need to start...
http://video.cnbc.com/gallery/?video=3000303295
to be expected possibly as early in the video the interviewer says "where is the opportunity to make a buck" ]
Here's how it could play out, according to Silvercrest's Chovanec.
"When property developers can't get more credit, they have to slash prices to unload their unsold inventories (and pay back their debts), which gives investors second thoughts about whether to continue plowing their money into property," he said.
"Sales dry up, prices fall, new [housing] starts dry up, construction dries up, sales of construction equipment, concrete, and steel dry up, land sales dry up, local government revenues disappear and they can't pay their debts ... in other words, falling asset prices undercut the basis for both past and future lending, and you've got a real system-wide problem," Chovanec added.
Read More > China property bubble popping? Not so fast - http://www.cnbc.com/id/101648816
Dong Tao, chief regional economist for non-Japan Asia at Credit Suisse .. http://data.cnbc.com/quotes/CSGN-CH .. in Hong Kong, describes developers as the "weakest link."
"If one property developer gets into trouble that could have a domino effect on the rest of the market," he said. "Without the central government taking action there will be a serious slowdown. Something has to be done and liquidity may have to be eased to help property developers."
In recent weeks, mid-sized developers such as Hong-Kong listed Greentown China Holdings .. http://data.cnbc.com/quotes/3900-HK .. and Shui On Land .. http://data.cnbc.com/quotes/272-HK .. issued profit warnings amid a downturn in the housing market.
Read More > Who's afraid of China's ghost towns? - http://www.cnbc.com/id/101678673
[ ok, on placing those two links just above the above one in i felt perhaps this article was geared toward investing and in the video in the above link we see Michael Kilbaner again. He says he has been talking of a bubble for years, yet expands on his positive view first seen in the embedded video above. One point he makes is that 2/3 of buyers are first home buyers. LOL, Kilbaner much more positive than most. I hope he is right. ]
A sharp slide in house prices that hurts consumer confidence could see economic growth in China drop below 5 percent, said Credit Agricole's Kowalczyk. To put that number into context, Beijing targets full-year GDP growth at 7.5 percent.
Support at hand?
In a bid to shore up the property market, a number of local governments have eased restrictions on home purchases in recent weeks and state-backed banks have upped lending to the sector.
"I decided to own a place because in Chinese culture and our tradition, it is important. I wanted to get my own place as I am going to start a family and why pay rent when you can have your own space?" said Wang, who expects construction on his new home to be completed next year.
[ This link is the one which in light of my wonder above re whether concern with their domestic market could be a factor in Chinese
investing in domestic real estate overseas. It's the link which prompted including this article in this post. I haven't read it, yet]
Read More > China developers rush overseas amid shaky home market - http://www.cnbc.com/id/101648483
Analysts add that the fact that Chinese households have relatively low levels of household debt is another reason why not to be too pessimistic about the housing market. An International Monetary Fund (IMF) report published in April ranked China the fourth lowest in terms of household debt levels among 11 Asian countries at around 12 percent of GDP.
"We believe the downturn [in China's property market] is unlike the situation in the U.S. that led to the Great Financial Crisis, and is unlikely to cause a crash in Chinese or international financial markets," said Clem Miller, investment strategist at Wilmington Trust Investment Advisors.
"For one thing, given requirements for large down payments, Chinese mortgage debt is low as a percentage of house value. Additionally, Chinese state banks typically hold these mortgages on their balance sheets rather than sell them into the market as collateralized mortgage obligations," he said.
Read More > Is China loosening its grip on the property market? - http://www.cnbc.com/id/101670194
Analysts say there is no easy fix to China's property market woes—the sector needs to go through a period of adjustment that helps put the economy on a more secure long-term footing.
"The good news for China is that it has produced more than it consumed for years. As a result, if its own output falls, it can afford to consume more than it produces," said Silvercrest's Chovanec.
"If the economy falters, consumption and living standards do not have to falter, too. China can run a trade deficit (assuming its forex reserves aren't depleted by mass capital flight). This can provide a cushion while it undertakes what would otherwise be a wrenching adjustment to its economy."
- CNBC's Wendy Min contributed to this report. - http://www.cnbc.com/id/101945949
had much to do with their jumping in overseas. Could be for Russians and other buying up, too. This first one is simply for the numbers included below.
Offshore investment is also thriving, as Australian property is seen internationally as a safe place to park money. Credit Suisse says Chinese
buyers have snapped up $24 billion worth of Australian housing in the past seven years and will spend another $44 billion in the next seven years.
http://www.afrsmartinvestor.com.au/p/property/how_to_make_money_off_the_plan_BZEi4pHMH4MFvUEa8uX8yN
Canada stands out as a country that does not collect data on the situation.
Foreigners Are Taking Over Canadian Real Estate
Definitely
Maybe
Posted: 08/28/2014 10:30 am EDT Updated: 09/11/2014 9:59 am EDT
The housing market is so inflated that the international community warns of a bubble ready to burst and locals fret that soaring prices have pushed the dream of home ownership forever out of reach.
Some weary house hunters have turned wary as reports circulate about an influx of wealthy foreign buyers, particularly from China, buying up the housing stock.
This isn’t Vancouver. Or Toronto. Or anywhere in Canada.
This is the scene in Sydney and cities across Australia where, similar to Canada, low interest rates have sparked a years-long rush into the market amid cries of overvaluation and deteriorating affordability.
Outrage from a public keenly aware of the allure of Australia’s stable economy for their Pacific Rim neighbours spurred the government to clamp down on foreign investment in the real estate market. In 2010, the Australians reinstated an old policy that largely restricts foreigners to investing in new developments only.
Data suggests those rules have helped channel foreign investment into new, large-scale developments, increasing Australia’s overall housing supply and potentially easing upward pressure on prices of existing homes. Or at least that’s the hope.
Still, the spectre of foreign competition figures into the national conversation about home affordability, even as statistics from the Real Estate Institute of Australia suggest the proportion of foreign investment in Australia’s overall housing stock is relatively small.
That’s the key difference between the similar housing markets of Australia and Canada — statistics.
Canada doesn’t collect the kind of data on foreign investment kept by Australia, the U.S., and a host of countries around the world.
And so, nervous market observers are left speculating about whether unprecedented levels of investment — foreign and otherwise — are driving up home prices in major cities, or if foreign buyers are playing scapegoat for a hot real estate market driven by other factors.
.. more, with a bottom video which mentions NY and stars Vancouver ..
http://www.huffingtonpost.ca/2014/08/27/foreign-real-estate-ownership-canada_n_5718705.html
We all have read of Chinese 'ghost cities'. Two here.
And Now Presenting: Amazing Satellite Images Of The Ghost Cities Of China
http://www.businessinsider.com/pictures-chinese-ghost-cities-2010-12?slop=1
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=57918022
In China, political pressure for full employment has led to similar late-stage growth obesity. In 2005, China built the largest shopping mall in the
world, the New South China Mall: Today it’s 99 percent vacant. China also built up a lavish district in a city called Ordos: Today, it’s a ghost town.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=48065063
?? thought we had more on Tornado Alley, but others if they exist are .. lol .. too ghosty for me.
Obviously, other than the fact that foreign investment in real estate helps to make it impossible for too many home-grown
citizens to buy in places they have grown up, one other reason for concern could be a Chinese real estate bubble burst.
Is Canadian Real Estate in trouble, Vancouver real estate bubble and China's real-estate bubble
In that video the top home builder in the world, he is Chinese, says the real estate situation in China is "dangerous".
So that is my link to your post. On reading it i wondered if one of the reasons Chinese particularly were investing
so heavily in overseas real estate was due to their own domestic concerns. Parts of this one suggest it is.
China real estate: A bubble bursting?
Dhara Ranasinghe | Special to CNBC.com
Sunday, 31 Aug 2014 | 6:42 PM ETCNBC.com
Buena Vista Images | Photographer's Choice | Getty Images
For 31-year old Beijing resident Wang Yuanzhi, talk about a bubble in Chinese property is not something to be too concerned about.
"If you look at the real estate market in China, it has already seen a golden decade of extreme fast growth. There will still be room for growth in this market, even in the next 10 to 20 years," said Wang, who bought a home under construction last December. "The whole housing bubble is a fear; it is a concentration on the risks that the real estate market faces."
Underlying confidence expressed by residents such as Wang may be what China's authorities hope will aid a recovery in a market that has seen prices fall for three straight months.
Read More > Chinese home buyers play the waiting game - http://www.cnbc.com/id/101919144
For other observers a downturn in China's once red-hot property market poses one of the greatest threats to the economy, the world's second biggest.
"The risks and exposure to property don't look the same as in the U.S. subprime [mortgage crisis], but new bubbles never look exactly like the last bubble (otherwise they'd be easy to recognize)," said Patrick Chovanec, chief strategist at Silvercrest Asset Management .. http://data.cnbc.com/quotes/SAMG .
"The exposure of China's banks (and now shadow banks) to real estate may look different than it did in the U.S., but it's very real. The main exposure is the reliance on property as collateral to support virtually all forms of lending throughout the economy, a situation that is very similar to Japan in the 1980s," he added, referring to a collapse in Japan's property market after a boom.
Read More > Unsold land in China signals developer uncertainty - http://www.cnbc.com/id/101897361
The importance of China's property market cannot be underestimated—it accounts for roughly 15 percent of gross domestic product and directly affects other sectors such as banking and construction.
Systemic risk?
To contain a boom in China's housing market and keep prices affordable, Beijing imposed restrictions over the past five years. Those measures together with a slowing economy now appear to be having an impact.
Average new home prices in 70 major Chinese cities fell 0.9 percent in July on month, following a 0.5 percent decline in June, and the question now is just how protracted the slowdown will be.
Read More > Are China's property vacancies a danger sign? - http://www.cnbc.com/id/101756254
"The real estate market has been the downfall of many major economies in the past—the U.S., Japan," said Dariusz Kowalczyk, a senior economist at Credit Agricole .. http://data.cnbc.com/quotes/ACA-FR . "So the worst case scenario for China's housing market is an economic crisis."
In China's case, credit expansion drives the housing market and when that slows it has a direct impact on real estate, say economists.
They point out that since 2008, China's money supply expanded by more than threefold and a lot of that money had gone into real estate. Latest data shows that the amount of money flowing into China's economy slowed to its lowest level in six years in July.
[ EMBEDDED VIDEO: .. heh, surprise this gentlemen seems to have little concern ..
Chinese policy 'successful' for real estate: Pro
Tuesday, 19 Aug 2014 | 4:15 AM ET
Michael Klibaner, regional director and head of research for Greater China at JLL,
comments on the Chinese residential real estate market and says developers need to start...
http://video.cnbc.com/gallery/?video=3000303295
to be expected possibly as early in the video the interviewer says "where is the opportunity to make a buck" ]
Here's how it could play out, according to Silvercrest's Chovanec.
"When property developers can't get more credit, they have to slash prices to unload their unsold inventories (and pay back their debts), which gives investors second thoughts about whether to continue plowing their money into property," he said.
"Sales dry up, prices fall, new [housing] starts dry up, construction dries up, sales of construction equipment, concrete, and steel dry up, land sales dry up, local government revenues disappear and they can't pay their debts ... in other words, falling asset prices undercut the basis for both past and future lending, and you've got a real system-wide problem," Chovanec added.
Read More > China property bubble popping? Not so fast - http://www.cnbc.com/id/101648816
Dong Tao, chief regional economist for non-Japan Asia at Credit Suisse .. http://data.cnbc.com/quotes/CSGN-CH .. in Hong Kong, describes developers as the "weakest link."
"If one property developer gets into trouble that could have a domino effect on the rest of the market," he said. "Without the central government taking action there will be a serious slowdown. Something has to be done and liquidity may have to be eased to help property developers."
In recent weeks, mid-sized developers such as Hong-Kong listed Greentown China Holdings .. http://data.cnbc.com/quotes/3900-HK .. and Shui On Land .. http://data.cnbc.com/quotes/272-HK .. issued profit warnings amid a downturn in the housing market.
Read More > Who's afraid of China's ghost towns? - http://www.cnbc.com/id/101678673
[ ok, on placing those two links just above the above one in i felt perhaps this article was geared toward investing and in the video in the above link we see Michael Kilbaner again. He says he has been talking of a bubble for years, yet expands on his positive view first seen in the embedded video above. One point he makes is that 2/3 of buyers are first home buyers. LOL, Kilbaner much more positive than most. I hope he is right. ]
A sharp slide in house prices that hurts consumer confidence could see economic growth in China drop below 5 percent, said Credit Agricole's Kowalczyk. To put that number into context, Beijing targets full-year GDP growth at 7.5 percent.
Support at hand?
In a bid to shore up the property market, a number of local governments have eased restrictions on home purchases in recent weeks and state-backed banks have upped lending to the sector.
"I decided to own a place because in Chinese culture and our tradition, it is important. I wanted to get my own place as I am going to start a family and why pay rent when you can have your own space?" said Wang, who expects construction on his new home to be completed next year.
[ This link is the one which in light of my wonder above re whether concern with their domestic market could be a factor in Chinese
investing in domestic real estate overseas. It's the link which prompted including this article in this post. I haven't read it, yet]
Read More > China developers rush overseas amid shaky home market - http://www.cnbc.com/id/101648483
Analysts add that the fact that Chinese households have relatively low levels of household debt is another reason why not to be too pessimistic about the housing market. An International Monetary Fund (IMF) report published in April ranked China the fourth lowest in terms of household debt levels among 11 Asian countries at around 12 percent of GDP.
"We believe the downturn [in China's property market] is unlike the situation in the U.S. that led to the Great Financial Crisis, and is unlikely to cause a crash in Chinese or international financial markets," said Clem Miller, investment strategist at Wilmington Trust Investment Advisors.
"For one thing, given requirements for large down payments, Chinese mortgage debt is low as a percentage of house value. Additionally, Chinese state banks typically hold these mortgages on their balance sheets rather than sell them into the market as collateralized mortgage obligations," he said.
Read More > Is China loosening its grip on the property market? - http://www.cnbc.com/id/101670194
Analysts say there is no easy fix to China's property market woes—the sector needs to go through a period of adjustment that helps put the economy on a more secure long-term footing.
"The good news for China is that it has produced more than it consumed for years. As a result, if its own output falls, it can afford to consume more than it produces," said Silvercrest's Chovanec.
"If the economy falters, consumption and living standards do not have to falter, too. China can run a trade deficit (assuming its forex reserves aren't depleted by mass capital flight). This can provide a cushion while it undertakes what would otherwise be a wrenching adjustment to its economy."
- CNBC's Wendy Min contributed to this report. - http://www.cnbc.com/id/101945949
It was Plato who said, “He, O men, is the wisest, who like Socrates, knows that his wisdom is in truth worth nothing”
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