Observations On The Chinese Real Estate Sector Following The Biggest Price Decline In 5 Years

Tyler Durden's picture

Comment viewing options

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


Please shorten the length of the commenter's opening paragraph (on the top of the page).  Sometimes they are so long, I can not read the headline.  Please consider.  Thank you.

oh_bama's picture

Seriously Tyler, this data must be a joke.

I monitor prices of some high end properties in Beijing and HangZhou and they are basically flat. THe ASP is a lot lower because a lot of the sales happened in far-away districts outside of loop-5 in Beijing. It is like using Stockton, CA prices to "average" with prices of houses steps away from Stanford. To mislead people was the whole point.

PY-129-20's picture

Burkina Faso is the next country in trouble. Heavy gunfire, soldiers pillaging the capital and so forth.


falak pema's picture

burkina has always needed a face lift...faso lifto...but this photo taken on april's fool's day could fool anybody into believing that face lifts come free as part of country's constitution.

Whence the current unrest. Where are our free face lifts??!!!!

magpie's picture

"Burkina Faso with nuclear weapons"

Ah, those were the heady days of Western dominance...

SME MOFO's picture

Homer: Burkina Faso? Disputed Zone? Who called all these weird places?

humblepie's picture

The PBoC will order the banks to start lending again. Should the banks fail, central government will swap the bad loans with triple rated government debt (AGAIN). The trick is how to balance that with surging commodity prices. My bet is for the ball to drop in the juggling act.

JollyRoger's picture

So what happens to foreign demand for US debt when Japan enters a tsunami/nuclear crisis and China enters a real estate depression?

Bleeping Fed's picture

UST's become a coveted safe haven once again, or so the story goes...

jt17's picture

I just spent four months in Beijing and actually inquired about real estate.  Things are actually going exactly the way the gov't wants them to.  Some things you should all know:

-it is official gov't policy to kill the real estate bubble but allow the gradual rise of the stock market.

-Builders are not allowed to price new developments above the price of nearby buildings.  Non-Beijing residents are not allowed to buy real estate in Beijing.  Beijingers need to put down a 30% downpayment on their first home.  Mortgages are not allowed to be taken out for second homes.  Foreigners are not allowed to buy property unless they can demonstrate one year of work/tax history in Beijing.

-look for all that excess liquidity to move into the stock market, real estate in foreign markets like Hong Kong, or real assets such as gold.

ivana's picture

thanks for fist hand experience. Was expecting promt gov reaction but did not know details

Bleeping Fed's picture

It's also official government policy to reduce inflation.  You think that's going exactly the way the government wants?  Where exactly did you inquire about real estate--the Ministry of Truth???

FunkyMonkeyBoy's picture

You can't eat houses. You can eat chinese.

falak pema's picture

So now what is the next one to fall? 

topcallingtroll's picture

does anyone think the whiff of deflation in the air is getting stronger?

I am feeling at least an intermediate top soon.

Is it too simple to think that inflation and money printing fears will keep the markets floating until the end of qe2, and then all risk assets are hit?  Including gold and silver?

topcallingtroll's picture

they changed the capcha!

Now you have to put in real answers rather than hit the save button three times.

PulauHantu29's picture

My friend moved to HK last year for a job. An apartment (1,850 sq ft) in the CBD costs over $1.8 Million....and he would still have to take a bus to work. He said wages: RE prices are more out of whack in HK and China then they were here in 2004-2007.

I am a Happy Renter now. They can raise the RE taxes to pay for all their Massive Deficits, Champagne Parties and $28 Million pension plans for school administrators all they want....go ahead...make my day!

ivana's picture

Chinese housing was bankster & chairsatan wet dream ... you could have seen that in all MSM puppets.

Gov will sove it without pain.

Now what BB?

cocoablini's picture

Chinese real estate is a local issue, not a nationally controlled issue. So local governments can only make money by selling real estate. their tax system is really not up to snuff. so of course the national government wants to kill the shadow, local banking government competition.

Ruffcut's picture

"build it and they will come."

Maybe they are making room for the Japanese refugees.

I thought you would end up with ghost towns, not start with them. I guess ghosts need somewhere to hang their hat, too.

FIAT_FixItAgainTony's picture

and let us not forget the fallout contamination zone so thoughtfully provided by japan.  people need land and yes, this is a global land/money grab.  why do TPTB need so much $$?

any videos of the "arks" as seen in the 2012 movie?  they sure looked expensive.  just sayin.

goldfish1's picture

the question is what happens next now that highly leveraged speculators are unable to flip properties on a monthly basis

Sell their gold?

chinaguy's picture

The housing market in China will do whatever the Party wants it to. They can slow it down or pump it up at will - watch the legislation at work and you divine their thoughts. 

Miles Kendig's picture

Great observation, as always chinaguy

sunny's picture

When the housing bubble popped in the US, the markets went pretty much straight down.  Both Shanghai and Hang Seng markets are near multi-month highs.  I guess they don't know how to crash like we do.  Are they immune? 



AldousHuxley's picture

Will China become Japan II? inflate from being pegged to US dollar printing, then deflate to the point where the economy can't ever recover?


random shots's picture

God Bless, America!

We have now taught a second country how to burn all their life savings by speculating in real estate. First Japan, now China!

Coming soon....100 Year Mortgages in Shanghai!

Miles Kendig's picture

Hell, even I seen it coming ..

6.  The CPF index (Chinese Pig Farmer – A basket of the favorite holdings of this intrepid class of investors) will continue to display attributes of bubbleiciousness, with some great churn potential as long as the fed’s policies remain in place, re: #5.  The day will come, rather soon I suspect when the fed will be forced to move to “stabilize” the CPF as it follows Buzz Lightyear and the CME to infinity and beyond.  I also suspect that there may be a change in CPF domestic weighting away from RRE into their favorite metals generally and ag in a more limited way.



htp's picture

Tyler, you should really hire someone who can read Chinese.

Here is a website tracking Beijing real estate prices:


It clearly states that "less than 2% of new homes have seen actual price declines", and those declines are typically less than 4%. The vast majority (>98%) are either flat or still rising.

There are literally hundreds of Chinese language websites and millions of Chinese actively tracking real estate prices all over the country. The ministry of truth can't deceive the 1.3 billion Chinese, but apparently they can still fool Western investors. Sad.

TGR's picture

Glad you mention it, though no intended slight on Zerohedge whatsoever (no need to praise the work of what every reader of this site already knows).

Being a long-term expat, over the past decade or more I have literally given up on attempting to shine light on China 'news' that is just plain wrong or taken completely out of context.

Simon Black, aka 'Sovereignman', has been one such habitual offender to the point of ridiculousness. His 'exclusive', "you read it here first folks" claims have bordered on criminally negligent.

Claims like "2009 is the first year Chinese have been allowed to own gold" (wrong), 'gold in Hong Kong is the cheapest on earth - great arbitrage play' (wrong); the "Chinese  government is literally cramming it down people's throats on every corner to by gold" (utter horse-shit, and a disservice to the gold community) - to name but a few - make a mockery of the fact that there are literally tens of thousands of  Chinese-literate Western investors, businessmen, precious metal-traders etc in China.

What, and a blow-in like Black breezes in for 5 minutes and makes outlandish claims to the detriment of PM holders the world over? For heaven's sake.

nameman's picture

Even so, realization authentic cheap jordans is just not the only phase that is certainly a well-known element with this item; price tag is Air Jordans Sale normally a tremendous thing to consider as nicely, with some sorts costing above $100 as of March 2010. For this air jordans for cheap motive, upkeep is acknowledged like a important element to receiving the extremely very best bang to the buck. best treatment for that option last final jordan retro 1 for sale results in preservation away from your Jordan shoe, as nicely as a complete whole lot much less discoloration or cracking while in the leather/plastic. Jordan shoes Nike Jordan 2009 however, are one of the most well-known while in the worldUtilize a defensive product or program to the shoe forward of exposing it toward the factors. Defensive options is normally ordered inside the kind of an Jordan shoe, wax, and silicone spray, all of that is on the marketplace jordan high heelsat most shoe retailers.

MGHJFHD's picture

Someone I work with visits your blog quite often and recommended it to me to read too. The writing style is great and the content is interesting. Thanks for the insight you provide the readers!


Gemstone such as tibetan jewelry|chalcedony jewelry|fire agate|moss agate jewelry|green moss agate, that are high in quality, because all beads scratch marks well and maintain their shine over a long era of time. There are many beads and shapes available.