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China news tagged with: real estate (89)

• China Developer’s Lament

  

  As part of a Forbes special on the billionaires of the world, Gady Epstein profiles real estate developer Zhang Xin, chief executive of Soho China:

  This is the Chinese economy in a nutshell–sellers selling a product for which there’s no natural demand, buyers buying whether they need it or not. In a market boosted by government-directed lending, both sellers and buyers have been getting only more ambitious and frenzied.

  For the seller, at least, this is perfectly rational. To not get in while the economy is hot means missing easy profits. Even as Zhang the Cambridge-educated leftist argues the real estate bubble is disserving the nation, Zhang the Wall Street-trained executive can argue reasonably that not participating in it would be disserving her shareholders. Sales at Soho China nearly doubled last year to $2 billion.

  As Zhang wonders where her country is heading, the tycoon is at the peak of her capitalist career, 15 years after she cofounded the company that became Soho. Fifteen years from now, will Soho China’s many skyscrapers in the Beijing’s skyline be admired? Or will they be scorned as icons of short-cut capitalism, built cheaply and sold for piles of cash to mining magnates and corrupt officials?

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  • March 10, 2010 2:38 PM

• Domestic Investors Snap Up China Properties

  

  From the Wall Street Journal:

  As some of Wall Street’s biggest real-estate investors weigh their next step in China after a bruising downturn, a rush of domestic players are filling the void, raising money and snapping up trophy properties… Domestic investors—including listed developers, private-equity players and wealthy individuals—were buyers in 83% of the deals larger than 100 million yuan ($14.6 million) last year, excluding land transactions, according to real-estate brokers CB Richard Ellis. In 2005, foreign buyers took 80% of such deals.

  Aggressive domestic competitors are raising onshore bank debt, attracting investment from China’s growing pool of domestic investors and moving nimbly to land deals through their network of contacts. Foreign investors, in contrast, typically have a lower tolerance for risk, require approval on deals, and need to get capital in and out through China’s tight currency controls.

  “Real estate is a highly restricted and regulated industry and the Chinese government has made it increasingly difficult for foreign investors to do deals in recent years,” says Joel Rothstein, a Beijing-based partner with the law firm of Paul Hastings, Janofsky & Walker LLP. “If you want to go into a tier-one city, good luck trying to compete against domestic money that can access bank financing and does not have to go through the foreign investor approval process.”

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  • February 16, 2010 11:39 AM

• In China, Fear of a Real Estate Bubble

  

  Investors, bankers, and the government are worried that China’s real estate bubble is preparing to pop. From the Washington Post:

  On Sunday, the nation’s cabinet, citing “excessively rising house prices” in some cities, said it will monitor capital flows to “stop overseas speculative funds from jeopardizing China’s property market.” It also said that any Chinese family buying a second home must make a down payment of at least 40 percent.

  For investors, many of the usual bubble warning signs are flashing. Fueled by low interest rates, prices in Shanghai and Beijing doubled in less than four years, then doubled again. Most Chinese home buyers expect that today’s high prices will climb even higher tomorrow, so they are stretching to pay prices at the edge of their means or beyond. Brokers say it is common for buyers to falsely inflate income statements for bank loans.

  Some economists and bankers fear that they have read this script before. In Japan at the end of the 1980s and in the United States in 2008, residential real estate bubbles ended in big crashes, battered banks and slow recoveries. With China acting as a key engine of global growth, a bursting of the Chinese real estate bubble could be a pop heard round the world.

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  • January 11, 2010 2:07 PM

• Liberating the “House Slaves”?

  

  From Economic Observer Online:

  The recent ban of a hit Chinese television series – Dwelling Narrowness (蜗居), which centered around China’s skyrocketing property prices and the pressure on its middle class to put up mortgages – highlighted the concerns of Chinese authorities over widespread public discontent against steep home prices.

  The too-close-to-reality drama series struck chord with Chinese’ growing anxiety in owning a house as the real estate market bubbling, and the term “house slaves” (房奴) – referring to those burdened by mortgages – came into being.

  The Chinese government has recently reacted to the swelling public resentment – aside from halting a drama series that could potentially fanned the discontent, it also announced a series of measures to cool the red-hot property market.

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  • January 1, 2010 4:47 PM

• Will The China Property Bubble Pop?

  

  From CNN:

  When Crystal Zhang decided to buy a house last August, it seemed like a no-brainer.

  For years, she had been spending a big chunk of her salary renting a studio apartment in Beijing, where she works as a mid-level executive in a multinational company. But her landlord kept hiking the rent, so she found a second-hand apartment and plunked 640,000 RMB (nearly US$100,000) as 52 percent down payment for a new home. She now lives in a cozy, one-bedroom flat and sets aside 25 percent of her monthly salary to pay for mortgage. “I hope to pay all up in five years,” says Zhang. “By then I can start making some other investments.”

  Zhang, 30 and single, is one of the fortunate ones. The upwardly mobile professional has ample disposable income–and a good sense of timing. In just five months since she bought her 85-square-meter apartment, it has already appreciated by 38 percent. “I’m glad I bought this one when I could still afford it, even though its price was already high,” she said. “Now the price is ridiculously high.”

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  • December 30, 2009 4:17 AM

• China Tightens Rules for Developers

  

  From Wall Street Journal:

  China has tightened land-sale regulations for developers in its latest attempt to take some of the steam out of the potentially overheating property market.

  The new rules include the first nationwide minimum down payment on land purchases from the government, and follow a vow from Beijing last week to curb what it calls an “overly fast” rise in property prices by boosting the supply of cheap public housing and redeveloping slum areas.

  Beijing is concerned about long-term inflationary pressure building as a result of a fast economic recovery spurred by a government-engineered credit boom and huge public spending. It also faces public anxiety about possible overheating in the property sector, as well as a potential asset bubble in the stock market, which could eventually threaten social stability.

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  • December 20, 2009 8:51 AM

• In China, Land Prices Fan Bubble Fears

  

  From Wall Street Journal:

  Land prices are on the rise again in China, as easy credit helps reverse last year’s correction but also raises concerns that another bubble could be in the making.

  When a property boom in China came crashing to a halt last year, purchases of land by developers for new projects began drying up. But this year, the area of land purchased has risen every month from the previous one. And in recent weeks, as a recovery in housing sales continues to strengthen, property developers are again paying top dollar for empty lots in China’s biggest cities.

  Last month, Gemdale Corp., a Chinese residential developer based in the southern city of Shenzhen, surprised the market by paying 3.05 billion yuan ($446.5 million) for a 210,000-square-meter plot in Shanghai’s Qingpu suburb, more than tripling the opening bid.

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  • August 5, 2009 3:39 AM

• China’s New Home Prices Rise as Bank Lending Triples

  

  From Bloomberg:

  New home prices in 36 medium- and large-sized Chinese cities rose 6.3 percent in June from a year earlier as bank lending tripled in the first half.

  The average price of new homes rose to 6,554 yuan ($959) per square meter, the National Development and Reform Commission said on its Web site today. New home prices in June rose 1.1 percent from May, China’s top economic planning agency said.

  The increase in new bank loans to 7.37 trillion yuan in the first half helped spur demand for property and boosted prices, said Bohai Securities Co. analyst Zhou Hu. Housing prices in 70 major Chinese cities rose in June for the first time in seven months, the government said July 10.

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  • July 20, 2009 4:45 AM

• China Home Prices Rise for First Time in 7 Months

  

  From Bloomberg:

  China’s urban home prices rose for the first time in seven months, adding to evidence that record bank lending is driving a recovery in the world’s third-largest economy.

  Prices in 70 major Chinese cities gained 0.2 percent in June from a year earlier, the National Development and Reform Commission said today on its Web site. Home values increased 0.8 percent from May, the fourth straight monthly gain. The China Se Shang Property Index of 24 real-estate companies rose 1.6 percent, beating the 0.3 percent drop in the benchmark.

  “China’s property market is reviving and real estate investment may rebound by 20 percent in the second half of this year, backing economic recovery,” Lu Ting, an economist at Bank of America-Merrill Lynch, said in Hong Kong.

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  • July 11, 2009 12:13 AM

• In China, Property Sales Show Signs of Picking Up

  

  Things are looking up for China’s real estate sales. From The Wall Street Journal:

  Analysts said the data contained signs of an early recovery in the property sector, key to revival of the world’s third-largest economy. Beijing’s 4 trillion yuan ($585 billion) stimulus plan relies mostly on government-led infrastructure investment, but it also is meant to mobilize private-sector investment in sectors such as real estate.

  “The government measures to improve affordability have had a very big impact,” said Michael Klibaner, head of China research at Jones Lang LaSalle, a real-estate-services company. “Between lower interest rates, lower transaction costs and lower down-payment requirements, affordability has improved enough that the number of people that can participate in the market has increased a lot. To us, that means that this recovery can last more than a month or two and will be more sustainable.”

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  • April 13, 2009 9:48 PM

• Morgan Stanley’s Chinese Land Scandal

  

  From New York Times:

  Since the height of China’s property boom, Morgan Stanley’s huge real estate deals here have been the envy of the industry. Then, scandal hit.

  Last month, with property prices here and elsewhere in free fall, the bank dropped a bombshell: in a Securities and Exchange Commission filing, it said it had fired an executive in its China real estate division after uncovering evidence that he might have violated the United States Foreign Corrupt Practices Act, which bars American business people from bribing foreign officials.

  That executive, Garth Peterson, was a star deal maker who had become a powerful figure on the Shanghai investment scene, people knowledgeable about the investigation said. His supervisor, the head of global real estate investing, was placed on administrative leave.

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  • March 2, 2009 8:41 PM

• Beijing’s Olympic Building Boom Becomes a Bust

  

  From the LA Times:

  The Beijing Municipal Bureau of Statistics reported this month that housing sales in the city dropped 40% last year. Chinese economists have predicted that housing prices will drop 15% to 20% in Beijing this year. Shanghai has experienced a similar decline.

  “You can look at this perhaps as a healthy correction in the market,” Kuijs said.

  In the longer term, he said, “China’s urbanization and overall development is going to lead to a very large additional demand for housing in the city.”

  Before that happens, the situation could get worse. Most of the real estate has been financed by Chinese banks, which have avoided writing down the loans. Eventually, they will be forced to, and that probably will have a ripple effect throughout the economy.

  “At the end, somebody is going to have to pay the piper,” real estate expert Rodman said.

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  • February 22, 2009 11:19 AM

• The Chinese are Coming, to Buy Bargain US Homes

  

  Some of Chinese new rich have joined the tours to take advantage of good deals on real estate in the dismal economy in the U.S., from AP:

  Beijing lawyer Ying Guohua is heading to the United States on a shopping trip, looking not for designer clothes or jewelry, but for a $1 million home in New York City or Los Angeles.

  He expects to get a bargain. Ying is part of a growing number of Chinese who are joining tours organized especially for investors who want to take advantage of slumping U.S. real estate prices amid a financial crisis.

  “It’s a great time to buy because of the financial crisis, and houses in large cities like New York and Los Angeles will definitely go up in a few years,” Ying said. The home is an investment, but he’s also planning long-term: He hopes his 5-year-old son might use it if he goes to college in the United States.

  See also an earlier USA Today story on the same topic.

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  • February 12, 2009 9:15 PM

• China Tries to Boost Real-Estate Market

  

  From Wall Street Journal:

  China said it will expand public housing and urged real-estate developers to cut home prices, as it tries to boost housing sales and the construction industry to support the weakening economy and avert further job losses.

  Prices are “still not affordable for ordinary people,” four government agencies said in a joint statement. “The key to revitalizing the real-estate market is to set reasonable prices,” the housing ministry, finance ministry, central bank and the National Development and Reform Commission said.

  The comments display the government’s continued focus on boosting the housing market, after it announced measures to aid home buyers in October and mid-December. At a news briefing on Tuesday, officials said the government will build more government-subsidized and affordable housing, but officials didn’t offer new ideas for boosting sales, which have been falling together with house prices in recent months.

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  • January 6, 2009 9:10 PM

• China Unveils More Steps To Boost Property Market

  

  From Reuters:

  China announced on Wednesday fresh measures to support the ailing property market, including cuts in business and transaction taxes for real estate sales and policies to make it easier for developers to obtain credit.

  The State Council, or cabinet, also said it would shorten to two years from five the lock-up period during which home owners are subject to a business tax if they resell their homes and that the tax would be levied on their capital gains, not the overall value of the sold property.

  “We need to further encourage and support housing purchases, maintaining reasonable expansion in the property sector,” the State Council said in a statement on the central government’s website (https://www.gov.cn). The move by the cabinet consolidates a series of steps Beijing has taken in the past months to prop up the sector, including pledging to build more low-cost housing and an earlier cut in taxes on home purchases that focused on people buying their first home.

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  • December 18, 2008 7:50 PM

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