one thing you should understand is that 90%+ purchased apartments in China over the past 15 years exhibit a higher current appraised value than when they were purchased, meaning almost all apartments and hence loans do not have a negative equity value at the current time. That fact is what Mish and many others do not want to accept. The appreciation of most of such investments results in the unwillingness of most owners to sell their property because they are deep in the money. Even a 30% drop will still leave the value above purchase levels in the majority of cases. Thus the situation in China's real estate market is an entirely different from the situation 3-4 years ago in the US when there was a fair percentage of mortgage holders who could hardly withstand a 10% drop. Keep this in mind to gain a proper perspective of the big picture.
what retards like asiaprop misses out is on the details All china homes are on 50-70 year leases resdential, Every single year if price does not appreciate, price automatically drops around 3% A 10 year old home on the same block is automatically 15-20% cheaper then a new apartment on the same block right next door. A 30 year old home on the same block is 30% cheaper then a new apartment rightr next door because its about to expire soon. Keep talking asiaprop, You got the brain of a chickpea, trying to act like you know.
are you dumb? What is the connection with the discussion and what you think lease terms are? You are talking your ass from your redneck quarter somewhere deep in the South, I doubt you have even ever traveled to Asia.
Let me explain it to you in 4 year old math. 1) Unlike a US property which has unlimited years of leasing, meaning it can be passed down in your family for 500 years. 2) Chinese properties only have 50-70 year leases, lower on commercials, That means Chinese properties are a depreciating asset as each year passes. GOV can take back your building and resell the land. 3) Understand? Freaken 4 year old.
please stay out of this thread and return to your own one, the one nobody else but you contributes to. You have zero idea about the mortgage market in general and a lot less about Asia and a lot lot less about the Chinese real estate market. On my ignore.
Next time you need another SCHOOLING in chinese real estate, let me know. Crawl back into your "ignore cave" now.
You have a pathetically poor understanding of both American and Chinese policies. The working assumption is that, after 70 years have expired, Chinese land-leases will be renewed at some % of property values at that point. The United States has something functionally equivalent to China's "50-70 year lease"... it's called the property tax. The property tax differs from locale to locale, but will usually range from 1%-3% of property value assessed annually. If you fail to pay this tax, your property can and will be seized and sold. You can get into a discussion about whether the Chinese government is likely to maintain this policy, as well as whether the American government is busy painting black helicopters for the eventual new world order... but I don't think this thread is the appropriate place for it. This thread should be focused on Chinese real estate, and your conspiracy theories about what may happen in 70 years is discounted by all but the real quacks.
1. Property tax implemented now on #2nd homes in china. 2. Home asset values drop 3% per year regardless of what might happens in 70 years. 1989 built apartment in the same block = 9k RMB per sqm 2010 built apartment in the same block = 16k RMB per sqm Whats the difference? retards. This is market value, not some imaginary bullshit Gov policy that changes by the day. People like me actually have real experience in investing in chinese real estate . Good luck with your "talking" and reseaching on wikipedia as your xperience, kids.
fyi just in case anyone actually take this idiot seriously - Dont. Whatever he's saying is just nonsense, you own the property outright in china just like in the US. The govt will not take back your house, noone cares about the land lease agreement, not even the government itself. It was an outdated policy that was put in when the real estate privatization started 20 years ago. The "lease" duration will be extended another 50-70 years when it comes close to maturity. They may use this extension opportunity to collect some one-time property tax since there is no taxation on residential property at all (the tax was paid in 1 shot when the land was "leased" - literally pennies), but that's about it. There were some discussion about just abolish it all together to make things less confusing, but some opposed because they feel it's an opportunity to collect some taxes and update the record (since real estate records only recently became computerized, many of the old properties that havent been transferred in recently years dont have good computer records). ---------------------- As for the other guy with the bullshit article crying about noone wants to have a discussion with him. It's like using a conspiracy "we are controlled by aliens" website as the basis of a political discussion. Get real..... ------------------------------------------- I have said this many times, shanghai real estate market will likely be flat to slight negative with highend luxury having a 10-20% drop overtime, since that's the way the government wants it, so it is no longer a great investment. But that's far different than "crash", "depression" - some of you are spewing. For those to happen, there has to be no demand, highly leveraged mortgage (aka zero down, subprime), and most importantly - a bad economy with high unemployment. The fundamentals are just not there, or rather the opposite. I can confidently say the ONLY reason the real estate market is flat now is because the gov forced it that way in fear of a bubble and unrest from the poor people feeling angry they cant afford a shack... if there wasnt a strong govt policy that was put in end of last year, the price would be at least another 20-40% higher right now.
You are the same guy topticking YHOO @ $600, "Its the new economy!" , but you are a necessity in markets. The reality is , the markets need retards like you to offload their crap assets , like property in shanghai or beijing.