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1 Chinese own 680 apartments in Guangdong province [Copy link] 中文

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Post time 2011-5-30 15:00:47 |Display all floors
We read too many news reports that government officials own tens of apartments.
For example one government official in Shanxi province own 35 apartments.

A few days ago, Guo Shiping, a professor at Shenzhen university, said one of his students own 680 apartments in Dongguan city, Guangdong province.
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Post time 2011-5-30 15:02:18 |Display all floors
true or false???

I am wondering the news "680 apartments owned by one guy" is whether true or false?

source: a newspaper in Guangzhou
h ttp://bj.house.163.com/11/0530/11/75A32GE600073SD3.html

[ Last edited by 468259058 at 2011-5-30 03:04 PM ]
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Post time 2011-5-30 15:17:47 |Display all floors

Reply #2 468259058's post

Must be unsold properties by developers.

Huge gearing, to own 680 apartments!
(probably Rmb100 million in purchase cost - and rented to a mix of "migrant worker" or "middle income workers" yet to purchase their own property!)
Rental value normally don't cover mortgage - as it's normally a little above the interest rate + maintenance cost!

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Post time 2011-5-30 15:32:59 |Display all floors
Well either this guy must be very rich - or he has no idea what "portfolio diversification" means
If I'd invest in the Chinese property market, I would at least invest in diffrent cities - rather than buying appartments in just one city. This investment strategy is just too risky to be considered sustainable.

However, I'm quite sure that this rumor is true - but I don't think that guy is bad because he buys many appartments. Perhaps stupid because it's too risky - but definitely not bad in a moral sense.

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Post time 2011-5-30 19:26:02 |Display all floors
If you plan to invest, invest the most familiar market.

Maybe housing market in Dongguan is the most familiar one for that guy.
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Post time 2011-5-30 20:15:10 |Display all floors
I don't agree on that - if there is a disaster, like a Tsunami or an earth quake, you immediately lose all your investments. Also, bubbles usually have much stronger influencese locally than over a larger area.
You definitely might gain more in a short term view - but you're taking too much risk.

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Post time 2011-5-31 11:25:17 |Display all floors

Reply #5 468259058's post

it's crazy to invest all in "one basket".

What if there is a downturn of "assembly" in Dongguan?
How's he going to maintain cashflow to pay for the mortgage?

Such number of apartments - nominally cheap apartment - since Dongguan is a low cost hypermarket, paddy market production centre! It must be a slow accumulation of capital, rents + huge mortgage debt = with unit sales to gain "capital gains" to help pay off some mortgage!

Probably most of the income is used to pay the mortgage.
The value of the property must be at least 3x more than mortgage!

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