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View Full Version : Careful guys if you are looking to buy asian reits - real estate boom over.


touchring
7th December 2007, 03:44 AM
Bankers got a habit of pushing investment plans to retail investor at the top of the cycle when institutions don't take them. Careful guys if you are looking to buy asian reits - the real estate boom is almost over.


http://www.cctv.com/program/bizchina/20071202/101226.shtml

CCTV - Shenzhen housing market in depression
Source: CCTV.com
12-02-2007 14:33

Transactions in Shenzhen's housing market have dropped sharply since August this year. And some property dealers believe the market could cool even more this winter.

During the first half of this year, Shenzhen's housing prices surged nearly 50 percent year on year. And in July, second hand property transaction volumes reached nearly 1.3 million square meters, almost double that of January.

Shenzhen's property market usually peaks in the autumn months of September and October. But the hot market has cooled since August.

A real estate agent from Shenzhen Central Property said, "Last month, there were at least 14 real estate agencies within 20 meters of here. But there are only 6 left. It's hard to survive this business."

Shenzhen Central Property is the city's top real estate agency, with nearly 180 outlets. Its monthly revenues reached about 90 million yuan during its peak in May and June. But the firm says it's barely making 20 million yuan per month now.

A real estate agent from Shenzhen Central Property said,"Our transactions have shrunk nearly 60 percent from the peak season. Nearly 70 percent of the people who buy houses are buying homes to live in themselves. But previously, investors had accounted for nearly 80 percent of our customers."

Wang Feng, deputy director of Shenzhen Real Estate Research Center,said, "Property prices will experience an adjustment. I believe Shenzhen's second-hand housing market is developing more rationally."

Property transactions in the city have been falling since August. And the situation got worse in October, as banks tightened credit... and local governments issued policies to curb rising prices. Over 100 real estate agencies have shut down in Shenzhen.

But analysts believe the market adjustment will lead to a healthy development of the industry. And that competition will help eliminate the weaker participants.



Editor:Zhang Ning

kenne
7th December 2007, 06:28 AM
This makes the US bubble look puny... But the housing will come roaring back in a few years. That's how China develop fast, and how any place develop fast, boom-bust-pause-boom-bust-pause...

What Asia REITS is traded in the US? I'd like to take a look...

zenmarketing
7th December 2007, 06:44 AM
I'm wondering how this bodes for my condo in downtown Chengdu.

It's currently sitting empty and I'm thinking of selling it when I go back to China next year.

touchring
7th December 2007, 07:17 AM
I'm wondering how this bodes for my condo in downtown Chengdu.

It's currently sitting empty and I'm thinking of selling it when I go back to China next year.


Probably not so much for chengdu, but hot places where speculation has gone to the extreme, like beijing and shenzhen, especially. If it does bust, it will present a buying opportunity. Particularly so for commercial reits.

Rubber Duck
7th December 2007, 07:30 AM
My impression is that the Chinese have severly squeezed the market to artificially slow it down to create stability. I think there is now probably significant scope for them to losen the controls they have put in place. Unlike the US they are not running on empty. Lets face it, what did yesterdays much vaunted intervention from Bush amount to?

touchring
7th December 2007, 07:37 AM
My impression is that the Chinese have severly squeezed the market to artificially slow it down to create stability. I think there is now probably significant scope for them to losen the controls they have put in place. Unlike the US they are not running on empty. Lets face it, what did yesterdays much vaunted intervention from Bush amount to?


Yes indeed, and they are further tightening controls, 1. China doesn't run a democracy system controlled by tax payers and corporations like the US or UK does, 2, they have to face a hard to control rural mob, so they will do whatever it needs to stem inflation.

By flushing the system, they will not repeat what Japan and now the US is trying to do. This bodes well for the long term, but bad for short term speculators.

touchring
2nd February 2008, 03:42 PM
This makes the US bubble look puny... But the housing will come roaring back in a few years. That's how China develop fast, and how any place develop fast, boom-bust-pause-boom-bust-pause...

What Asia REITS is traded in the US? I'd like to take a look...



I just found one, it's an ETF. http://biz.yahoo.com/bw/071218/20071218006008.html?.v=1

http://finance.yahoo.com/q?s=TAO

Now it's $22, i don't mind buying some at $5. (*writing TAO ticker on my investment whiteboard!) :o

Rubber Duck
2nd February 2008, 04:04 PM
Maybe but it will still be going up in dollar terms. :p