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China New Home Prices Rise in 69 Of 70 Cities
China's attempts to curb runaway inflation in its housing market - which in a country in which the relatively young capital markets lack the breadth and depth of their western equivalents remains the only venue in which to park any of the excess cash generated from the global central bank liquidity avalanche - continue to be met with failure after failure. Overnight, the China Statistics Bureau reported that in September new home price across the country's 70 tracked cities, rose in virtually all of them, or 69 compared to a year ago. On a monthly basis, or compared to August, new home prices rose in only 65 of China's cities, compared to 66 in the month prior. And while the CSB data differs from the Shanghai Uwin data reported yesterday, the government's data while less stunning still shows the extent of the Chinese housing bubble and the persistent inflation plaguing the country: Beijing new home prices rose 1% M/m; and 16% Y/y; Shanghai new home prices rose 1.4% M/m; and 17% Y/y in September.
More from SocGen's Wei Yao:
China’s home prices continued to rise in most major cities in September, albeit at a somewhat slower pace. Out of the 70 cities monitored by the National Bureau of Statistics, 65 saw new home prices rise month on month, one fewer than in August but still close to record highs. On average, prices of new residential apartments increased 0.67% mom (8.4% annualised), slowing from 0.79% mom in the previous month; while prices of second-hand properties increased 0.42% mom in September, compared with 0.35% mom in August.
Moreover, housing inflation in first-tier cities – referring to Beijing, Shanghai, Guangzhou and Shenzhen – remained much stronger than in smaller cities, with the average gain of new flat prices in those cities nearly twice the pace of others.
The housing activity data released earlier indicated strengthening property construction. Growth of housing starts surged to +41.3% yoy in September from -20.1% yoy in August, partly thanks to a base effect. The quarterly growth rate of starts quickened to 14.9% yoy in Q3 from 8.8% yoy in Q2. However, sales volume growth decelerated to 21.2% yoy from 32.4% yoy and real estate investment also grew slower in Q3 at 18.9% yoy, compared with 20.4% yoy in Q2. In addition to much higher statistical bases, the downward trends in sales and investment – at least in yoy terms – point to weakening in housing start growth in the coming quarters. Hence, the under-supply situation in big cities is unlikely to change inthe near term.
In terms of policy, we see no grand tightening in the offing, except that banks are extending fewer mortgages. Long-term solutions, such as property taxes, land reform and sustainable funding sources for affordable housing, are still slow to come.
And to think how much ink was spilled over the summer when the PBOC announced that, in an attempt to be prudent and to cool the housing market, it would "taper" the market liquidity by CNY1 trillion... nearly leading to the collapse of the banking system. Funny how just like at the Fed, that whole idea was quickly buried without anything as much as a peep.
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The FED, PBOC and tapered turds. Things that make you go Hmmmmmmm.
I’m not sure that’s their biggest problem…
MASH Episode 131, which originally aired November 08, 1977 was called “Change Day”… The Army, one day, closes the camp to foreigners; the local Korean population, the villagers, and has the MASH personnel switch their blue scrip (blue Army dollars) to red script (red Army dollars) rendering completely worthless all the blue script villagers acquired from previous transactions, sales and services to Americans.
I have a feeling leaders in China haven’t seen that episode…
… Winchester brews an elaborate insider-trading scheme when he finds out the Army plans to switch from blue scrip to red. He goes around buying as many blue scripts from desperate villagers as he can… at 10 cents on the dollar, planning to exchange it on “change day” to red script, dollar for dollar…
If we live to see a real modern day “Change Day”… my money is on Goldman Sachs.
In Nam the "change day" timing was Top Secret. There may have been a rumor now and again but the actual event always took everyone by surprise when it was announced.
We had "Change Days" in Vietnam starting back in the 60s. MPCs (Military Payment Certificates) were prefered over the local Piaster and of course dollars even more. The black market exchange rates in currencies was so outrageous the US Military (MACV) had an IBM System 360/50 installed in Saigon that was dedicated to tracking currency exchanges.
On change days any local vietnameese who wound up with the old MPCs would have burn parties, destroy all they had, and start all over again in the black market. I was one of the Field Engineers who installed and maintained the IBM systems back then.
Fucking cool, hardcore inside info there man. +1s for you.
Was it the profanity? Fuckin sorry guys, I was fucking out of order. I'll try not to be a cunt in future.
Good luck wit' dat. Don't let the door hit you in your fanny pack on the way out.
Only a fool would compare the PBOC to the FED, China to the US.
--Mr T
When Mr. T said this it made me think. I did some research and it turns out to be true.
So I guess it IS different this time then.
There you go again comparing this time to the last or next.
It's always different. Time passes, variables change. Problem is most do not recognize the change in variability in their equations and ignore, or worse yet do not account for important variables.
That's why Mr T is the smoothest, and smartest of all the brothers. He gets it, and Colonel John "Hannibal" Smith knows this. If anything ever happens to Colonel Smith I for one am positive that Mr. T will emerge as the defacto leader of the 5th Special Forces Group and lead the team to victory!
C'mon man. Face would take charge for sure. BA was just muscle.
-1 FOR THAT? Fuck sakes, the guy couldn't even get on a plane without being sedated, how could he lead an elite force, it's a ridiculous suggestion.
Not my fault the token black guy was a racial stereotype. He had a cool van if that makes it better.
Only a fool speaks with such Jibba-Jabba.
People ask me what the "T" stands for in my name. If you're a man, the "T" stands for tough. If you're a woman or child, it stands for tender!
http://www.youtube.com/watch?v=DJnKm6ftPu0
PBOC is substantially tied to the FED by the CNY peg.
Be careful in China.....the govt articifially props up
home prices using fake buyers to bid up prices. It's
only to increase gdp.
Never trust anything in china.
Especially figures. This is the country that melted their cookware and starved, to inflate steel production numbers.
But that was just that naughty man Mao, the guy on their money.
What if there is no bid process, just a regular sale with one interested buyer. Should I assume that buyer was a government agent up to the `usual` GDP fuckery?
From what I hear from Taiwan news, many fake buyers come in to
confuse & raise prices. They're paid by govt companies to conceal the
actual low number of customers.
You really don't read such news in English speaking media but it's
common knowledge in Taiwan & Hong Kong.
communists....hmpf!!!
I understand it is very hard to find a home in many Chinese cities......Must be the smog.