Chinese Real Estate Bubble Pops: Beijing Real Estate Prices Plunge 27% In One Month

Tyler Durden's picture

Could the Chinese monetary tightening be working? The National Bureau of Statistics has released its latest food price update for the period April 1-10, which shows that while most foods continue to rise modestly, several food products have plunged particularly cucumbers and rapes, both falling 8.8%, kidney beans 6.3% and kidney beans down 6.3%. Yet this is nothing compared to what is happening to Chinese real estate: it appears Chanos' long anticipated property bubble may have popped... but the supersonic boom is so loud that nobody has heard it yet.

From Market News:

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 only question is how much actual equity buffer was used in these purchases. For all intents and purposes a drop of this magnitude levered even 2 times (assuming 50% or so equity down) means that China is on the verge of a complete bubble implosion. If the pummelling in the Beijing real estate market shifts to other cities not only is the Chinese tightening regime over, but the SHCOMP in the next few weeks could get very interesting as people understand the world's biggest marginal bubble has popped.

h/t Robert

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
tek77blu's picture

another collapsed market? uranium stocks. the japanese crisis has take companies down 50-70%...if those aren't bargain sales, I dont know what is:

Oh regional Indian's picture

tek, perhaps Uranium as a fuel source is dead? Except for .gov use?

I think so and that sector may never really revive.


Thunder Dome's picture

What's the alternative ORI?  The vast majority of people here were crying the sky was falling during the BP spill--writing about mass evacuations and Corexit.  Where are BP, RIG and APC trading now?  50-150% higher.  Tek is on the right track.

Harlequin001's picture

Anybody want to buy a Bentley? Apparently there's fucking loads of 'em going cheap in Beijing...

Oh regional Indian's picture

Thunder D, not sure if you are following the GOM story on alt. press, because it's pretty dam bad. Stocks may be up, but this is the most manipulated market (especially the past year, since GOM began, coming up to the anniversary actually). 

And th ealternatives...hmmm, if I point them out, the naysayers come screaming out of the woodwork. ;-)

Try this when you have time at hand...

No one is ready to get off the oil/cheap energy bandwagon...yet.



falak pema's picture


You are a strange mix of oriental mystery and occidental pragmatism.

Being an oriental makes you a proponent of Holistic solutions.

Being an occidental makes you also a practitioner of reductionist actions.

Untie the Gordian knot or cut it; the world waits for would be inventors cum entrepreneurs to become practitioners. Biting the bullit is the acid test. But then timing is of essence to find the tipping moment to produce the best holistic effect from a reductionist proposition.

Hopefully, a realistic contract to build prototype or test a theoretical model not an impossible compromise of principles...I understand the dilemma brother, only to well...I hope the 'solution' is worth the voyage as lonely prophet in his desert trek. 

Oh regional Indian's picture

Falak, looks like the visionary's dilemma is familiar to you.

They say that when you are granted a vision, you are usually also granted the energy to see it to fruition and the discernment to know a mirage from reality in that desert.

I'm not sitting on my hands, always doing and un-doing. People are startign to appriach with open hearts and minds. I know that the motive for profit cannot be in the mix at the start.

Timing is really everything. So I play music, and watch. 

your turn of phrase and in-sight is much apreciated.


Bicycle Repairman's picture

"Prices of new homes in China's capital plunged 26.7% month-on-month in March"

LOL.  Can you imagine a similar plunge in Washington DC prices after Bernanke exits QE?


oh_bama's picture

BJ housing prices (good locations) were either flat or even slightly higher.

  • A lot of losers are hoping for a lower prices.
  • A lot of politician are manipulating statistics ( they learn fast ) 
squexx's picture

You've posted the same garbage on every other thread. Begone, troll!

eigenvalue's picture

But this information is from the Chinese government. Therefore I highly doubt it

Harlequin001's picture

let the boom continue then...

PeaBird's picture

I'm with you Herr eigenvalue.

My cynical self thinks the inflated chinese gold production figures over the past few years is for the purpose of not making the price explode, which in turn is for the purpose of chinese private & official accumulation.

My other cynical self thinks the recent chinese trade deficit figures release, and this latest release is to help provide plausible deniability to claims that the Renminbi should be revalued upwards, but instead be devalued against the USD downwards, due to a trade deficit & "now" plunging real estate values.

Nothing is coincidence in this game.

almost_have_a_name's picture

"kidney beans down 6.3%..."

but kidney's are up 235%, ice is up 73%.

augie's picture


old video but none the less Ordos' are everywhere.

vxpatel's picture

I thought most chinese investment property purchases were all cash...?

Imminent Crucible's picture

That was what you were told by the China pumpers. The 60% down payments applied to individuals buying a "second home" (read "apt to flip").

But commercial purchasers (and who else would buy an entire apt building, office tower or condo complex?) were never subject to those restrictions.  So the Beijing and Shanghai bubbles were bid up at the commercial level.  Further, the foreign money took on its leverage outside China; much of it was leveraged investment fund money.

Chanos 1, Rogers 0

patb's picture

Its all shark loan schemes.  Invisible banking.


Families lend, friends lend, and they all rely on each other for cash reserves. The ties of honor and reputation are all that enforce repayment. It is a great shame if you can't repay. Face is everything. Many simply repay by "rolling the debt" borrowing more to pay the vig.

I have had to bail my mother-in-law out several times. The accumulated interest was greater than the principal she originally borrowed.

Parents of lend to their children to buy their condo with the understanding it will be repaid or they will come to live in their old age under that roof. Almost no one has the 20 to 30% down to buy a place. The down payment is typically borrowed at terrible interest or comes from a "marriage gift" which had its origin in borrowed funds, not from savings.

It's like fractional reserve lending on steroids. Everyone works their ass off to pay the loan, pay the vig, and save their face so they can borrow more if needed. A collapse of the bubble could cost lots of folks their life savings. This makes the financial aspect of Chinese society much more fragile than it appears on the surface. There is a lot of interconnected personal debt below radar.

vxpatel's picture

makes subprime seem quaint in comparison...

no2foreclosures's picture

Another one of my "Nine 2011 Predictions" is becoming true:

5. The Chinese real estate market, the last investment vehicle in China for those Chinese with money, will also begin its collapse suddenly, hitting hard cities like Shanghai, Beijing, Fuzhou, etc.  According to a very recent article by UK's Daily Mail Online, there are as many as 64 MILLION empty homes in China with no one occupying these brand new homes!  This China real estate crash will have serious implications for the real estate market in Vancouver.  There won't be m/any Chinese millionaires plunking down $1+ million CASH for buying real estate in Vancouver, as has been the case over the recent years.

Harlequin001's picture

were these 'Nine 2011 predictions' made in  er 2011 by any chance?

wasn't difficult to see that one coming...

I also predict that it will either rain, there will be a financial calamity, a nuclear power plant will blow up or it will go dark tonight...

I too have a 100% success rate in making predictions.

Question is, 'How far will Chinese house prices fall, and when will they stop falling?'

We'd all like to know when the global economic expansion will take off again. If you can predict it, perchance...

no2foreclosures's picture

If you read the full article (PDF), it was published on December 23, 2010.

As to your last question, GD2 or Great Depression 2 won't end until we are through with WW III or WW IV, because that's the last bubble to inflate (pun intended).

Cdad's picture we see why The Goldman moved on that copper downgrade.  We also probably know why the commodity trade unwind more broadly has begun.

Oh regional Indian's picture

Rapes down 8.8% and noboy's heard it.

Such delicious typos, layered.

Sad to report that the Indian RE bubble bubbles on, every "rent" in the bubble's fabric being papered over by more "foreign" money.

We have REMax selling houses here now! Why? And LJ Hooker? The irony is not lost on me.


Rodent Freikorps's picture

Spell check will never replace careful proofreading.

Tyler Durden's picture

Neither will it replace actually checking the source information. Go ahead. Click. Let us know what you find.

Harlequin001's picture

I think you may have missed the point of that comment entirely Tyler...

Global Hunter's picture

Having been born in the UK and raised in North America, I would go back to the UK for the summer during my school days. I was a taken aback one day when driving out in the countryside my Grandmother said something to the effect of the rape was looking lovely in bloom.  

I think its flax seed in North America.

Byte Me's picture

And in Dutch (or Flemmish at least) rape(n) are turnip(s).

Nice to hear that turnips are now affordable by the masses again then...

Rodent Freikorps's picture

Learn something new every day.

My bad.

cheesewizz's picture

Just hate those high beta houses...

MSimon's picture

The high gamma houses are worse.

pan-the-ist's picture

Isn't this what should have happened in the US?

Harlequin001's picture

coming to a house near you...

overmedicatedundersexed's picture

Tek, stop buying the paper the Uranium itself..but remember you can't eat uranium with out getting a hot ass.

Harlequin001's picture

psst, got some nice glow-in-the-dark fish going cheap...

big discounts...

very good quality, much cheapness...

from Japan.

JPDG's picture

Looks like Bernanke inflated the wrong RE market. 

no2foreclosures's picture

Now that's funny.  And too true.

slewie the pi-rat's picture

lol!  USA exports rule!  try to beat america in a race to the bottom ya commie bastards!  go ahead, make our day! 

i've said it before and i'll say it again:  our banksters will kick chinese ass til the kingdom cometh.  new BRIC reserve currency?  okey dokey!  just revalue the fuking yuan upward like we told ya in the first place & shut tf up!