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The Music Just Ended: "Wealthy" Chinese Are Liquidating Offshore Luxury Homes In Scramble For Cash
One of the primary drivers of the real estate bubble in the past several years, particularly in the ultra-luxury segment, were megawealthy Chinese buyers, seeking to park their cash into the safety of offshore real estate where it was deemed inaccessible to mainland regulators and overseers, tracking just where the Chinese record credit bubble would end up. Some, such as us, called it "hot money laundering", and together with foreclosure stuffing and institutional flipping (of rental units and otherwise), we said this was the third leg of the recent US housing bubble. However, while the impact of Chinese buying in the US has been tangible, it has paled in comparison with the epic Chinese buying frenzy in other offshore metropolitan centers like London and Hong Kong. This is understandable: after all as Chuck Prince famously said in 2007, just before the first US mega-bubble burst, "as long as the music is playing, you've got to get up and dance." In China, the music just ended.
But more so than mere analyses which speculate on the true state of the Chinese record credit-fueled economy, such as the one we posted earlier today in which Morgan Stanley noted that China's "Minsky Moment" has finally arrived, we now can judge them by their actions.
And sure enough, it didn't take long before the debris from China's sharp, sudden attempt to "realign" its runaway credit bubble, including the first ever corporate bond default earlier this month, floated right back to the surface.
Cash-strapped Chinese are scrambling to sell their luxury homes in Hong Kong, and some are knocking up to a fifth off the price for a quick sale, as a liquidity crunch looms on the mainland.
Said otherwise, what goes up is now rapidly coming down.
Wealthy Chinese were blamed for pushing up property prices in the former British territory, where they accounted for 43 percent of new luxury home sales in the third quarter of 2012, before a tax hike on foreign buyers was announced.
The rush to sell coincides with a forecast 10 percent drop in property prices this year as the tax increase and rising borrowing costs cool demand. At the same time, credit conditions in China have tightened. Earlier this week, the looming bankruptcy of a Chinese property developer owing 3.5 billion yuan ($565.25 million) heightened concerns that financial risk was spreading.
"Some of the mainland sellers have liquidity issues - say, their companies in China have some difficulties - so they sold the houses to get cash," said Norton Ng, account manager at a Centaline Property real estate office close to the China border, where luxury houses costing up to HK$30 million ($3.9 million) have been popular with mainland buyers.
Alas, as the recent events in China, chronicled in minute detail here have revealed, the "liquidity issues" of the mainland sellers are about to go from bad to much worse. As for Hong Kong, it may have been last said so long ago nobody even remembers the origins of the word but, suddenly, it is now a seller's market:
Property agents said mainland Chinese own close to a third of the existing homes that are now for sale in Hong Kong - up 20 percent from a year ago. Many are offering discounts of 5-10 percent below the market average - and in some cases as much as 20 percent - to make a quick sale, property agents and analysts said.
Also known as a liquidation. And like every game theoretical outcome, he who defects first, or in this case sells, first, sells best. In fact, since panicked selling will only beget more selling, watch as prices suddenly plunge in what was until recently one of the most overvalued property markets in the world. And with prices still at nosebleed levels, not even BlackRock would be able to be a large enough bid to absorb all the slamming offers as suddenly everyone rushes to cash out.
The biggest irony: after creating ghost towns at home, the Chinese "uber wealthy" army is doing so abroad.
In a Hong Kong housing development called Valais, about 10 minutes drive from the Chinese border, real estate agents said that between a quarter and a half of the 330 houses are now on sale. At the development's frenzied debut in 2010, a third of the HK$30-HK$66 million units were sold on the first day, with nearly half going to mainland China buyers.
Dubbed a "ghost town" by local media, the development built by the city's largest developer, Sun Hung Kai Properties Ltd (0016.HK), is one of many estates in Hong Kong where agents are seeing an increasing number of Chinese eager to sell.
"Many mainland buyers bought lots of properties in Hong Kong when the market was red-hot three years ago," said Joseph Tsang, managing director at Jones Lang LaSalle. "But now they want to cash in as liquidity is quite tight in the mainland."
Perhaps our post from yesterday chronicling the crash of the Chinese property developer market was on to something. And of course, as also described in detail, should China's Zhejiang Xingrun not be bailed out, as the PBOC sternly refuted it would do on Weibo, watch as the intermediary firms themselves shutter all credit, and bring the Chinese property market, both domestic and foreign, to a grinding halt (something he highlighted in our chart of the day).
Meanwhile, the selling rush is on.
In a nearby development called The Green - developed by China Overseas Land & Investment (0688.HK) - about one-fifth of the houses delivered at the start of this year are up for sale. More than half of the units, bought for between HK$18 million and HK$60 million, were snapped up by mainland Chinese in 2012.
Because so much changes in just over a year.
"Some banks were chasing them (Chinese landlords) for money, so they need to move some cash back to the mainland," said Ricky Poon, executive director of residential sales at Colliers International. "They're under greater pressure from banks, so they're cutting prices."
In West Kowloon district, an area where mainland Chinese bought up close to a quarter of the apartments in many newly-developed estates, some Chinese landlords are offering discounts on the higher-end, three- to four-bedroom apartments they bought just a few years ago.
This month, a Chinese landlord sold a 1,300 square foot (121 square meter) apartment at the Imperial Cullinan - a high-end estate developed by Sun Hung Kai in 2012 - for HK$19.3 million, 17 percent less than the original price. The landlord told agents to sell the flat "as soon as possible," said Richard Chan, branch manager at Centaline Property in West Kowloon.
In the same area, a 645 square foot, 2-bedroom flat in the Central Park development was sold in just two days after the Chinese owner put it on the market at HK$6.5 million in what agents called the year's best bargain - the cheapest price for a unit of its kind over the past year.
Don't worry there will be many more bargains. Why? Because what was once a buying panic - as recently as months ago - has finally shifted to its logical conclusion. Selling.
"The most important thing for them is to sell as soon as possible," Centaline's Chan said. "In the past two weeks, those who were willing to cut prices were mainland Chinese. It is going to have some impact on the local property market, that's for sure."
Indeed. And once the Hong Kong liquidation frenzy is over, and leaves the city in a state of shock, watch as the great Chinese selling horde stampedes from Los Angeles, to New York, to London, Zurich and Geneva, and leave not a single 50% off sign in its wake.
The good news? All those inaccessibly priced houses that were solely the stratospheric domain of the ultra-high net worth oligarch and criminal jet set, will soon be available to the general public. Especially once the global housing bubble pops, which may have just happened.
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They will sell anything & everything because they're in a race to stem cascading macro margin calls that could lead to great flood IMHO
http://portal.ransquawk.com/headlines/usd-cnh-has-moved-through-6-20-to-...
01:35 USD/CNY opens above 6.20 at 6.2053 to print a high of 6.2105, heightening fears that complex hedges could be forced to sell collateral in-order to cover bets that were placed when the wide consensus was that CNY was a one way bet.
p.s. - I just took first sip of Chinese Black Bear Stout. Sweeter, less bitter than Guinness with more malty flavor.
I'm drinking founders porter. Good stuff man if you have not had it.
It's great. More like a stout than a porter, too. Try some Goose Island Dragon's Milk while we're on subject of American Brews. It's one of the best AmBrews I've ever had.
will do. thanks for the tip.
I'm drinking Ninkasi Total Domination. It's from Eugene, Oregon.
Clown Shoes Vampire Slayer is a fave of mine, quite a flavorful stout.
Packs a punch too
WTF! Is this place a now hipster craft beer web site?
Even though it's Heineken, try Moretti La Rossa Birra Doppio Malto
You should try TheReplacement's homebrew barley wine at 8.1%.
I'm drinking cyanide and piss and smoking menthol cigerettes at a queer bar.
I don't believe you about the cyanide.
Did Barry show up yet?
Hail to the Twinky.
Reggie Love just popped into our hidey hole. We're so out of here. He ordered a wine spritzer & is smoking a clove cigarette.
I'm drinking water--it's 11AM here LOL.
(Have a nice dry Martini when the sun sets over the east Lamma channel)
Cheers
i am drinking knob creek, sold the last of my scrap copper and brass. ps and some cast iron.
heh you said "knob" heh heh.
Drinking Miller Genuine Draft, in the can, costs about $20 a 36 pack here....and worth every penny. I have some Mississippi Mud in the fridge...but I prefer white trash, cheap assed beer that can sit next to me on the floor at the computer (just reach down and pop another while tossing the empty into the recycle bin over at the TV. (Younger son will take them in for a free (to him) $60 next time he visits.)) West of the Mississippi it's MGD, east of the Mississippi it's Pabst Blue Ribbon aka PBR.
In poorer days I became accustomed to room temp Hamm's and Death Valley warmed Lucky Lager (the rebus on the cap was an indicator of how fucking drunk you were) or what was the cheapest shit in Florida in the early 80's...KISS beer/Milwalkee's Best.
My tongue is simple (you should see my wife *ba-bum-bump! ting*) and beer pretension leaves me bemused. I drink beer to slack a thirst and to get drunk. ANY beer. Sometimes a cold one serves the purpose, but usually my simple shitstash is at arm's length, room temp, and the cheapest shit I can find.
And people doubt the South will rise again...
Fools.
~its all going according to "the plan" nothing to see here...just move along
There still seem to be a lot of observers who think this gold selloff was somehow due to the FOMC or the "resolution" of the Crimea crisis. But having watched the price action most of this week so far, I remain amazed at how slow and steady the downward selling ramp has been. None of the usual $10 or $15 instant plunges. And why selling starting immediately Monday morning, all Tuesday and all Wednesday plus overnight sessions in other time zones? Such a STATELY, measured but continuous decline!
This has to be largely due to selling of speculative Chinese-owned gold.
Cool. Bargain hunting one last time, then sit back and watch Rome burn.
wadda bout wine futures? old Bord/Burg bottles.
I disagree Tyler Durden.. My bet is that they will dump US Trasuries before they dump Gold. Look at what happened to Bonds during 1930 - 1932. Even quality Interest Bearing Bonds by solid and fiscally sound Companies were dumped regardless of the soundness.
The USA Treasury is far from solvent and sound. I am sorry, sir, but I do foresee some selling but the Bonds will be dumped before Gold.
surely you only mean paper gold, Tyler? without the pyz, China is a paper tiger.
No rising phoenix like from the ashes without the real deal
All of this comes at a bloody bad timing: here in Europe wealthy Russians have also been buying high-end luxury real estate. I work for a consultancy to the real estate industry and the south of Europe has been getting pretty good sales to Russians and Chinese buyers.
If Europe is now sanctioning Russians and China is faltering, then ???
Is there any way to profit from this mess? Maybe stock up on ammunition and rice bags.
Food and water is a good start but no man is an island so just as important is building/joining a group who has it together.
My group - Medics Farmers Engineers Defenders and so forth.
Get to know your local law enforcement and the community in general.
PS
I used to make fum of the people with degrees in basket weaving. Ha Ha jokes on me it will come handy after all. (snark/chuckle)
I've been sort of wondering about this myself.
I think you are bringing up a big pink elephant sitting in the corner that more than just yourself and I have been quietly pondering.
Gold was selling harder than silver today. I suppose that might make sense, since gold had flown higher on its chart than silver did in recent weeks.
Here is your slow, steady step-by-step selling today:
http://www.pmbull.com/gold-price/
Except that's a 10-minute chart. Back it up to a daily or weekly, and it suddlenly looks much more reasonable, if not healthy.
FOMC days - and Ukraine crises - usually result in dumps of gold, not steady declines.
Where are the $5 and $10 plunges? To me, even your ten-min. chart looks pretty steady...this is weird action, considering the media and pundits are claiming that it is due to "FOMC jitters", Crimea crises, etc.
when your too big to fail is too big to bail "that means total debt extinguishment." Lehman is a pimple compared to this baby.
It's quite possible that China disintegrates actually. This Ali Babba fiasco is quite telling...and obviously great news for New York.
I see them all over the place. What are you looking at?
A smooth $60 of declines took THREE DAYS and three overnight Asian/European trading sessions and yet commenters STILL think this was an orchestrated FOMC "plunge"????
Were you watching the PRICE? Or just some chart?
We were looking at your car and saw the puddle of oil in the garage and wondered what the hell that was.
The Chinese economy held together through all the crazy crap in the last few years and now suddenly starts to tank when the US starts screwing with Russia. What a coincidence! I think the US has gone too far this time. Just like nukes economic bombs are hard to "take back". Unlike nukes you detonate these in your home city and watch the West blow up. China laughs quietly at US. Oh whatever will China do with all those factories without the west. HAHAHAHAHAHHAHAHAHAHAH OH shit.
China consumer --> China store --> China factory --> Chinese consumer
Ok, so any guesses when this hits New York and Vancouver?
What west-coast cities have seen a lot of Chinese buying?
Bay area mostly on the west coast. Some SF but I think there's been more action around San Jose and ajoining cities (Palo Alto, etc.) Just informed speculation on my part, but there seems to be a lot more Chinese tech influx in that area.
I suspect all this pales in comparison to Vancouver.
A bad economy for Russia hits London and east coast real estate. A bad economy for China hits west coast real estate. So now real estate falls again and Obama finishes his Presidencey and is remembered as a new cold war President.
Sucks to be Obama.
He only hopes that is all he is remembered for
Sales slowed down in San Ramon,hats off to the teens who pulled the 94 year old lady out of the fire
All that the realtors talk about in Hongcouver is H.A.M. (hot asian money) buying up everything. Soon it will be N.A.M. (no asian money) selling everything.
Hey dumbass, the 80s called and want you back. Hongcouver... better bring your Sony Walkman with you on that time machine.
By by Australia.
Distraught Ozzie Gulls are welcome on the New River for a bit of, ahem, TLC and comforting;)
Charles Owen "Chuck" Prince III, should be chained to the back of a 2014 Chevy Silverado (leased at $269/mo for 32 months with no money down of course from ALL-LIES Bank) and dragged across the crumbling roads of Chicago until all of his flesh is shredded. Too extreme? Tell me what punishment is appropriate for this puke.
A friend of mine is a saleswoman at NeedlessMarkup in ChitCongo, two years ago she had these animals showing up to buy $50k purses. Money obtained from hubby mortgaging the office tower 4 times to 4 different lenders.
It took America 200 years to build itself up from nothing and China accomplished this feat in 10? How the hell did that happen.
America gave the manufacturing to China. Whoever makes all the goods gets all the dough.
They did not have to create the technology, it was all imported and/or stolen.
It is one thing to build up a country and its people, it is another to hold on to that wealth.
As I understand it, another aspect of Chinese money is that they more or less expect to lose a little on every deal, they are happy with 97% net value protection over five years, where most others would cringe at anything below 100% and complain about anything below 100% plus inflation plus at least a little bit of real ROI. So yes it can turn around, the brokers should be happy, and the markets volatile. Whether or not this has macro consequences is to be seen.
One aspect of money laundering?
I would take that. I've been boned enough.
Way better deal than what Miami banks were charging to clean your cash in the 1980's.
Good. I can probably do without Chinese music, whatever that sounds like.
They must need more cash to buy this dip for the push past 1900. Or they maybe just want to short more JPY as short yen is a risk-less trade; BOJ has already said they will print till the yen goes to zero.
Liquidating....
....to whome?
Anyone who makes a bid.
Anyone dumb enough to catch a falling knife.
Field Marshal Von Rippuoff.
Anyone who makes a bid.
deflation, roundeye biatch!
"The good news? All those inaccessibly priced houses that were solely the stratospheric domain of the ultra-high net worth oligarch and criminal jet set, will soon be available to the general public."
Those prices are going to have to drop 99% before I could afford one.
Just when I was ready to big time getting back into the residential copper pipe "recycling"buisness, copper prices are down. Oh well, judt have to pay the crack/meth heads and families less.
Forward!
The Deer is back as reality goes on... Ponzi keeps the deer fed and happy.. Sooner or later we are all facing the Deer in our back yard once they run out of food...
http://www.zerohedge.com/news/deer-back-markets-go-reality
So we need to hit 20t in debt for the ordinary American to respond?
I wil be shooting a LOT of deer.
I am in a Vancouver area hotspot for Asian buying in the 1.5-2.5 million range and no sign of a slowdown,, Three houses nearby sold recently and quickly for a high number, maybe all time high, prices have been surging for the last year, listings are few and Asians are NOT selling... at least around here. Three yaers ago we popped up 30%, then dropped maybe 10%, now breaking to new highs.. Real estate is always local, here we get Asian families seeking a western education for the kids. I had expected a slowdown since the Gov changed the residency Visa laws, but not yet, still rising.
Maybe that's the difference between Chinese living in Canada and Chinese living in China?
And I marvel at that.
The Chinese think the world of a western education, never quite understanding where it happened or how it was that their children became so debauched, and their values so polluted.
Amazing.
Too much US television influence - now there is stupidity squared
I hope Canada's 'western education' is better than the leftist stupidity taught in the US these days.
The 'western education' in the US will leave your child reading 'see spot run' in their senior year.
I rove defration
Yeah nice try, that's a Japanese stereotypical accent you moron.
The party goes on forever, and the music never stops. I'm sure Goldman and Co will manage to turn this into a win win.
China is lucky, the Chinese real estate bubble bursts in Canada.
told ya.
As much as I hate to say it, it's probably, temporarily at least, dollar bullish.
And as much as I hate to say it, much of the behavior here re: gold has been increasingly aligning quite well with that of BTC.
We're in trouble, because we're not intelligent enough, even now, to know the difference between speculation and insurance.
Down we go... ignorance and self-absorption lead the way... with no hint of a change of trajectory.
Go Gold -- but rue the day you thought it would make everything ok.
gotta love ZH. where else are you going to get this kind of reporting/information weeks in front of msm. while often too far in front of the curve and a bit 'chicken little' in many stories---no where else are these ideas even contemplated, yet thoroughly presented, discussed and commented.
tip of the hat to ye Tyler
Double panic in Upscale London! Russian rich now fearful of sanctions need to exit the London Property Market pronto! Now we see a speading panic to Chinese, they are the ones fueling London upscale housing bubble 2.0!
As a side, some of the most expensive post codes in London are based around Greens, Commons and Parks. Now a days the flood of EU job migrants has packed these green spaces with foreign job seeks living rough. In Belgravia, the little square I used to play tennis in is often home to a dozen or so of such people. Fucking world we live in, the ultra rich have to call the coppers to kick the Rumanians off the bloody tennis courts to get a game in! Thank you Tony Blair, Gordon Brown and the cunt in chief Cameron. Hope you cunts rot in hell. NuLabor, the biggest traitors to England since the Gunpowder Plot.
Well, that's what happens when you live in a scenic garden spot with great cuisine and almost perfect weather...,
oh..., never mind.
You should see Seattle parks downtown, they are permanently squatted all over by hordes of homeless. I don't know why they are tolerated to camp in public like that.
they are tolerated because the alternative is to eat your wifes face, you pick.......
Where do you think they should be? If they are going to remain among the living, they've gotta be somewhere.
(I have some ideas about where they should be, but the USDA, FDA and various state agencies would tell me that my ideas are illegal.)
Gifford Pinchot Forest. 1.4 million acres of wildnerness, fresh running water, and food. Buses will get you to the Casinos and you can walk or hitch from there.
We have our own version of the same going on over here with our own set of 'cunts'.
And finally, slowly, the tide begins to move out.
And just for the record. Have not sold one ounce, one share of my miners or changed any positions. Could not be more comfortable with all the stash and miners I loaded up on at the end of November. Am selling nothing. Do I miss short term trading moves. You bet. But I am not that smart to know ahead of time what I time perfectly in hindsite. Lets chat at the end of the year.
Thank you Zero Hedge for the truth.
I'm in Thailand and it's deflating as we speak.
We have the mother of all property bubbles going off here. In slow motion.
Credit is loose all over Asia.
This is going to get real ugly real fast.
upside? Cheaper hookers.....
"Cheaper Hookers".....LMAO, Perfect.
Hookers is the name of oneof the largest realtors in Australa.
Quite approprate.
.
Thai putang was hot stuff when I was in the Navy. Though I swing with white chicks myself, still, I do find asian women awful sexy.
You can't predict a Thai economic downturn.
Much of their money comes from food exports, and there is a looming shortage due to weather issues. If Thailand has a good crop then it's like the Saudis exporting oil. Money flows in and your collapse certainly never happens.
Tourism also. You talk about the great Thai pussy. You think you're the only guy who knows this, Shit. Old man tours galore to Thailand. Tourism money. "Sponsor" is a Thai word khao jai?
Many things about Thailand you can not predict. Just enjoy the legs bro.
Taper tantrums strike again!
This is like economic warfare, create inflation and dependency then crash the sucker with mass withdrawls. Unless that is; if some sort of capital controls were put in place.
Pushing workers back onto the hillsides and extorting sums from the expats
Don't think the link to article is up there:
"As credit tightens at home, Chinese sell Hong Kong luxury real estate
BY YIMOU LEE
HONG KONG Wed Mar 19, 2014 5:11pm EDT"
http://www.reuters.com/article/2014/03/19/us-hongkong-property-chinese-i...
Southern Cali is about to get slapped hard. The Chinks have been outbidding each other for houses out there. Welcome to America bitchez.
From today's WSJ:
Zhejiang Xingrun's chairman and his son have been detained by local police after being charged with illegal fundraising. The charge is a broadly defined one often leveled against private businesspeople when their companies collapse.
Is this what's behind the selloff?
Used to be someone like this was detained, charged, tried, convicted and sentenced within one month.
Now it's more like 2 or 3 years.
The result is the same, however.
Best case: 15 years in a Chinese prison, no parole.
Worst case: Frog marched out of the sentencing hearing into a van, strapped down, executed, and their organs are sold on the black market. Body is then immediately cremated. No autopsy, thank you, please drive through.
And, the little sauce on the bun is the hefty sales tax (stamp duty) that the government approved to cool the property sector.
'On 22 February 2013, the Financial Secretary announced that the Government would amend the Stamp Duty Ordinance to adjust the ad valorem stamp duty (AVD)'. That was just formerly approved by LegCo. So the AVD is 8.5% on those luxury properties over 21.7 mil. Prior to that with effect from 20 November 2010, any residential property acquired on or after 20 November 2010, either by an individual or a company (regardless of where it is incorporated), and resold within 24 months (the property was acquired on or after 20 November 2010 and before 27 October 2012) or 36 months (the property was acquired on or after 27 October 2012), will be subject to a Special Stamp Duty (SSD). That little extra chili can run up to 10% the market value of the property if held for 6 months or less.
Now eat your buns.
A 20% haircut is nothing. Drop another 30% on top of that 20% and you're getting somewhere.
Oh great. This was really great timing for Yellen to announce more tapering.
first stages of econmic warfare opening salvos. shelter in place with duct tape, poly sheet plastic and fill the bathtub with gin.
Southern California cities like Monterey Park, Alhambra, Arcadia, and of course luxurious San Marino have all been bid up in a frenza with Chinese money. These bubblicious areas will be interesting to watch in the coming weeks/months.
Anywhere in the San Gabriel Valley, really. People in China don't know where Chicago is, but they know San Marino.
1997
Bollocks. Chinese everywhere in Vancouver and they came with bags of money to buy and STAY. Because China is a polluted dump and BC has pristine water & clean air. All over USA look at big cities with fresh air. Chinese all over the place, and wives looking for white cock on the side I kid you not. Give it a whirl. Leggy little things.
.......BC has pristine water & clean air.......
well.....before Fukashima
It's not serious until you can buy an apartment building with one gold coin.....
One of those Tuff Shed prefab structures that 12 Chinese live in.
Xaaaactly.
Affordability will increase great a lot of people have to get knockouts the way and then I can feel superior in some 950k two bed one bath in Calif?
Two 55 gallon cans a roll of duct tape and a pillow
China's going to punch Japan in the face.
My money's on the samurai.
China is going to continue to send its pollution over to Japan.
Pollution in the form of USD?
I'm checking Ebay HK often...maybe pick one up there for fun for under $80k there as the RE market crashes.
Bitches
I'm 57 years old. I date a 31 year old brown girl from Issain. She's the first in her rice farmer family to go to college.
Very smart, English and good computer skills. She works for an organic coconut product factory. Makes about $20,000.00 a year. Pays next to nothing in taxes. So more like $28,000.00
She just bought a new Jap car for $16,000.00 financed at %3. Who the fuck is providing this cheap credit? She's a good risk but this is carry trade money. Pure and simple as liquidity dries up this credit bubble that is cooking in Asia is going to pop.
For me as an xpat it's very welcome. I live very cheap and very well for little money.
I'm paying $600 a month for a beachside condo next to a bad ass mall/shopping market with any kind of Western food you could want. For under $1000.00 a month I live like a king. I spend another $1000.00 on fun stuff and I have my choice of women here.
Bar girl or educated 30 something. Up to me. Thai women are hot as hell and sex is in your face completely open and honest.
If this sucker corrects forty percent I just may by a condo here. No property tax or income tax. But I want to see a correction. This property bubble is world wide. I see it all over Asia.
Right now hedging my USD position with gold and gold miners
But I see this thing from a world away. It's real boys. The real deal Fiat money gone wild!
Ron Paul warned us about this years ago....
Issain? E-saan. You forgot to mention how good is the gai yang somtum. Sabai Dee brother.
The corrected post.
Bitches
I'm 57 years old. I live in Thailand. Yes I'm a Mark Faber type guy. I date a 31 year old brown girl from Isan. She's the first in her rice farmer family to go to college.
Very smart, English and good computer skills. She works for an organic coconut product factory. Makes about $20,000.00 a year. Pays next to nothing in taxes. So more like $28,000.00
She just bought a new Jap car for $16,000.00 financed at %3. Who the fuck is providing this cheap credit? She's a good risk but this is carry trade money. Pure and simple as liquidity dries up this credit bubble that is cooking in Asia is going to pop.
For me as an xpat it's very welcome. I live very cheap and very well for little money.
I'm paying $600 a month for a beachside condo next to a bad ass mall/shopping market with any kind of Western food you could want. For under $1000.00 a month I live like a king. I spend another $1000.00 on fun stuff and I have my choice of women here.
Bar girl or educated 30 something. Up to me. Thai women are hot as hell and sex is in your face completely open and honest.
If this sucker corrects forty percent I just may by a condo here. No property tax or income tax. Living here in my sixtys sounds better than the USA. More freedom and cheap.
But I want to see a correction. This property bubble is world wide. I see it all over Asia.
Right now hedging my USD position with gold and gold miners
But I see this thing from a world away. It's real boys. The real deal Fiat money gone wild!
Ron Paul warned us about this years ago....
Wi Too Low...
ho lee fuk!
Mi Ass Ich
Withholding requirements in California on the sale of real estate for out of state residents...
California law requires withholding of 3 1/3 percent (.0333) of the total sale price. Alternatively, you may elect to withhold on the gain on sale and apply the following rates:
witholding as a tax?
Is selling of gold next? If the Chinese were huge buyers they could become big sellers of gold. Doesn't that stand to reason?
If you are storing your own gold in your own vaults, why not just borrow against it?
What happens in Macau, does it stay in Macau? How will this be affected? Any opinions?
Tyler intern #4, one little picadillo: ".... it is now a seller's market:" is not the same as "... a liquidation.".
Wouldn't that be a buyer's market, though of course this new trend probably has quite a ways to go.
Perhaps someone can beat this bubble, but if so, bring it.....
On Pyay Road in Yangon, a mostly residential area a few miles from what passes for downtown, comparable to places like Knightsbridge in London or Lutyen's Delhi in India, lots (no houses, just lots) are being put on the market at the equivalent of $53 million per acre. In 1997 the equivalent asking price would have been $100K per acre. Over that same period, per capita GDP has only risen from about $50 to (generously) $500 per year.
Hey, they're not making any more land. On the other hand, they are making pie in the sky.
IMHO, the article over-simplifies.
For example, surely need to distinguish between 'ultra-wealthy Chinese' purchases in HK (which is not really independant of China), and in centres like London or NY.
The purchases in HK might well be a part of a speculative wind-up, that gets sold off to raise cash to protect the on-shore position.
But the purchases in London, NY etc. were bought as bolt-holes, not investments, along with appropriate passports and visas.
They are owned outright, and not pledged to anyone in or outside China. The on-shore Chinese investments (in property, copper or anything else) could go to zero, but the London, NY property will not be touched.
About the only thing that might happen is that those properties become occupied, as the bolt-hole option is taken.
Vancouver, Toronto, Sydney, Melbourne, Bangkok, Chiangmai, Phuket, Singapore ... the list just goes on.
The recent accumulation of excess unsold housing inventory in my part of FL has little or nothing to do with the Chinese. It's the US housing bubble all over again. OK I get the point that China has a problem too.
"That's not right"
Sum Ting Wong
"Are you harbouring a fugitive?"
Hu Yu Hai Ding
"See me ASAP"
Kum Hia Nao
"There goes Stupid Man"
Dum Dum Wa King
"Small Horse"
Tai Ni Po Ni
"Did you go to the beach?"
Wai Yu So Tan
"I bumped into a coffee table"
Ai Bang Mai Ni
"I think you need a face lift"
Chin Tu Fat
"It's very dark in here"
Wao So Dim
"I thought you were on a diet"
Wai Yu Mun Ching
"This is a tow away zone"
No Pah King
"Our meeting is next week"
Wai Yu Kum Nao
"Staying out of sight!"
Lei Ying Lo
"He's cleaning his automobile"
Wa Shing Ka
"Your body odour is offensive"
Yu Stin Ki Pu
"Great"
Su Pah!
With the coming crisis in liquidity issues, if the wealthy have liquidity problems, then the smaller people have worse. Even if houses are 20 percent off, that is still a sale, not a dump. If it's 50 percent off, that may be considered a dump. But if the liquidity crisis gets that bad, and the wealthy cannot afford low prices, then neither will anyone else be able to.
Slo mo bubble bursting, though.
Let's fix up all those vacant luxury units.
You bring the strippers, I'll bring the beer and spray paint.
The classics never fade.
Took the train from Zurich Central station to the airport and counted 72 construction cranes. The vacancy rate is .75% . The market needs 4% to 6% to function properly. Where is that going to end.. ?
Somebody loan me a dime.
Lotta BS in there. If Hong Kong were a seller's market prices would be up. As for Chinese buying offshore real estate for safety to avoid mainland regulators and then selling to raise cash to shore up their mainland businesses, that does not make sense. They were speculating, like everyone else, otherwise they would have fled to where their holdings were.
I live in Thailand and my girlfriend talks like that! I swear to god she can not do an R in English. I make fun of her and she Thai kicks me in the ass! She is 26 years younger than me!!!!!
9 March;
"Chinese developers bet on Malaysia as investors turn cold on Hong Kong, Singapore."
http://www.reuters.com/article/2014/03/11/us-china-property-malaysia-idU...
CHINA DEFAULT IS COMING
The concept of a wealthy Asian, Russian or Saudi buying property in places like London, New York, Vancouver, and parts of California relates directly to this sort of crisis in their local economy. They are off shoring their wealth to protect against credit crisis, geopolitical risks, market instability and ultimately the confiscation of assets by unfriendly regimes.
Last I checked Hong Kong is part of China- all the more reason for wealthy Chinese to keep funneling resources out of there to 'safe havens' like Vancouver where no one is going to bother them and the air is clean.
the ripple effect of all this is going to be more like a tsunami
"as long as the music is playing, you've got to get up and dance."
"We all got up to dance, oh, but we never got the chance
'Cause the players tried to take the field - the marching band refused to yield
Do you recall what was revealed the day the music died" - Don McLean American Pie
Quoted by Mish shortly after Chuck Prince 'stepped down'
Good, I can finally buy Valais at a reasonable price as opposed to the stupid price tags its been posting.
Excellent input
I'm definitely watching was transpires in Vietnam. That region looks good for taking some retirement money and investing when prices drop. Ciao!!