Author: patricksan

Is it the right time to buy property in China [Copy link] 中文

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Post time 2007-2-2 05:23:59 |Display all floors
Unfortunately, the Shanghai market will fall dramatically over the next few years. Here is its current trajectory:
This is similar to the uptrend before the 1929 crash in the U.S.:

The government has repeatedly said that investors will have to learn for themselves about risk. In our most recent report, we dicuss the reasons why China will outperform the U.S. over the next few decades after the spectacular crash.

Paul Lamont
Lamont Trading Advisors, Inc.

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Post time 2007-2-3 05:25:34 |Display all floors


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Post time 2007-2-3 06:36:06 |Display all floors

Affordable Housing

I do not remember what the actual projections are, but I think there was talk of moving at least 300,000,000 into cities from rural areas, in the next 10 years.  At 3 persons per family, that works out to 100,000,000 units of housing required.  And we are talking about very low cost housing, as these rural folks probably do not have a lot of money.  

How about a plan that works something like this:  Assuming development cost of RMB 1,500  per sq. m. (development and construction), not counting land cost.  Assume gross area of 50 sq. M. for these low units - which gives effective unit areas of 35 sq. M., the cost per unit would be RMB 75,000.  Carrying cost, at 10% return, would be about RMB 700 per month (assuming amortization over 30 years).  That should support rents of say RMB 1,000 per month.  

Can city income support RMB 1,000 rent per family, especially in the secondary cities?

Take a page from the Hong Kong experience, build these as housing estates for the low income, and throw in 10-15% retail space as enticement for the developers.  Sell bonds to support the program.  The rents can also go up over the years.  Design the units so they they can easily be remodelled and combined into larger units.  After 20  or 30 years, convert and sell them to the tenants or other low income folks.

The local government only has to put up the land.  The retail and the added population's consumption would bring in even more tax revenues, and it solve a big part of the low income housing problem.  

100,000,000 units would translate to a RMB 7.5 Trillion project.  Probably will need to get some foreign financing involved.  But I know many Chinese would be happy to buy long term bonds that pay 8 or 10%, if secured by housing.  Much safer than gambling the stock markets.

If qualification to rent or buy is limited to low income folks, this would not adversely affect the commercial developments.

[ Last edited by tongluren at 2007-2-3 06:38 AM ]

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Post time 2007-2-7 13:57:58 |Display all floors

high price for houseing

now people find it impossible to buy their own houses by their own gover ments ae trying to run cities to earn more profits.The officials  auction  state-owned lands which increace the cost of the housing.

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Post time 2007-2-7 20:21:34 |Display all floors

Reply #1 patricksan's post

yes! Maybe the property prices in China will be the same with the developed country!

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Post time 2007-2-8 11:04:56 |Display all floors


Human is selfish!
Money is the best thing in China!
If you in possession of money,that's means you in possession of all things.
Now you can earn morn money,other people watch your money every minutes!
So, everything is appreciate,not in beijing shanghai guangzhou^^^^^^

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Post time 2007-2-8 13:24:50 |Display all floors

it depends on attitude of government

government policy is a important factor that influence the price of real-estate. if our government is a responsible government ,he should pledge that everyone have house to live.

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