Futures based on Chinese real estate...

Discussion in 'Economics' started by heech, Aug 10, 2010.

  1. heech


    There's clearly a wide divergence in opinion about the future of Chinese real estate. There are many, many overseas investors who believe a correction is due, and would be inclined to short such an instrument. At the same time, there are many Chinese rushing into purchases partly because of concern that housing prices are going to continue to rise.

    What we need is a method for speculators to short Chinese real estate prices. If only someone listed a futures instrument based on Chinese real estate prices.

    A young couple planning to get married/graduate in 3 years could buy a futures contract expiring then, and effectively "lock in" current price levels without actually purchasing a home. More importantly, foreign investors could short Chinese real estate prices and help bring some balance to the supply/demand question.
  2. There are futures for Chinese RE ... its called the Australian $ and you can short it (although not necessarily against the USD) if you think the China prop market is going to crash. You could also go long Aussie interest rate futures.
  3. just21


    TAO chinese real estate etf.
  4. dakoo


    A futures contract would probably be useless, as real estate just isn't as simple as say a 1000 barrels of crude. It would be hard to index all kinds of Commercial Residential estate indices. Due to such complexity, it would never attract any liquidity whatsoever . The only way you could make a bet would be on some OTC instrument you privately negotiate with a bank desk. The bank desk would then find a sucker to take the bait ala john paulson. But i suppose you're not doing any of that are you? :)
    see ya
  5. Could you explain the connection please? I have heard vague references that China imports a lot from Australia.