http://blogs.reuters.com/globalinvesting/2012/01/17/home-is-where-the-heartache-is/ Insights behind the investment headlines Tue, 21 May 2013 02:27:16 +0000 hourly 1 http://wordpress.org/?v=3.4.2 http://blogs.reuters.com/globalinvesting/2012/01/17/home-is-where-the-heartache-is/comment-page-1/#comment-17652 China-is-big Wed, 11 Jul 2012 03:12:17 +0000 http://blogs.reuters.com/globalinvesting/?p=4923#comment-17652 Housing prices in China are... wow! Absolutely off the wall. I have been living here for a while and, besides the ever increasing cost of living, the house prices are far from being curbed down by whatever sort of policy Beijing devises. Moreover there's the fundamental problem of ownership rights: when you buy a house it is nothing but a lease for 75 years. I feel the entire housing market in China is perilous to say the least, and doesn't offer much value to the final consumer because access to credit is difficult (requires huge downpayments) and usually the banks offer far-from-safe flexible interest rates. And should we talk about the prices in big cities like Shanghai and Beijing? I won't even start talking about the swanky megavillas and top-notch pads you can find advertised on upscale publications for foreigners such as City Weekend (http://www.cityweekend.com.cn) because common mortals have to shed out insane amounts of cash for nothing but a lousy apartment in suburban Shanghai. We're talking about 300k to 400k British pounds for a 70 square meter apartment in a swarm-like postmodern complex. Whenever I consider the situation I ask myself: who's really paying for all of this? Vacancy rate is still way above 50% according to some rumors... bubble burst in the air? Housing prices in China are… wow! Absolutely off the wall. I have been living here for a while and, besides the ever increasing cost of living, the house prices are far from being curbed down by whatever sort of policy Beijing devises. Moreover there’s the fundamental problem of ownership rights: when you buy a house it is nothing but a lease for 75 years. I feel the entire housing market in China is perilous to say the least, and doesn’t offer much value to the final consumer because access to credit is difficult (requires huge downpayments) and usually the banks offer far-from-safe flexible interest rates. And should we talk about the prices in big cities like Shanghai and Beijing? I won’t even start talking about the swanky megavillas and top-notch pads you can find advertised on upscale publications for foreigners such as City Weekend (http://www.cityweekend.com.cn) because common mortals have to shed out insane amounts of cash for nothing but a lousy apartment in suburban Shanghai. We’re talking about 300k to 400k British pounds for a 70 square meter apartment in a swarm-like postmodern complex. Whenever I consider the situation I ask myself: who’s really paying for all of this? Vacancy rate is still way above 50% according to some rumors… bubble burst in the air?

]]> http://blogs.reuters.com/globalinvesting/2012/01/17/home-is-where-the-heartache-is/comment-page-1/#comment-11561 rissey Mon, 04 Jun 2012 12:56:15 +0000 http://blogs.reuters.com/globalinvesting/?p=4923#comment-11561 Housing, real estate is the easiest fiscal policy for any government to churn GDP. Governments are never willing to prick the real estate bubble - too much vested interest. Housing, real estate is the easiest fiscal policy for any government to churn GDP. Governments are never willing to prick the real estate bubble – too much vested interest.

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