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Deja Vu As China Enters 2014 With Higher Home Prices

Deja Vu As China Enters 2014 With Higher Home Prices

Jan 19 2014, 3:06am CST | by

The Chinese will face another year of rising home prices. According to the National Bureau of Statistics, 65 out of 70 cities surveyed saw home prices ending the year higher than they were a month...

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27 weeks ago

Deja Vu As China Enters 2014 With Higher Home Prices

Jan 19 2014, 3:06am CST | by

The Chinese will face another year of rising home prices.

According to the National Bureau of Statistics, 65 out of 70 cities surveyed saw home prices ending the year higher than they were a month prior.  January is unlikely to be an exception, as China  housing remains on performance enhancing drugs.

November data showed prices relatively stable, but up a tad in Shanghai, Guangzhou, Beijing and Shenzhen, China’s busiest cities. Prices are up less than half a percent, however, in the month long period.

High home prices are mostly the cause of higher incomes and lackluster financial options for wealthy Chinese, who prefer to use housing as a store of wealth. But that kind of investor demand has driven up prices in cities that actually lack housing, especially the affordable kind, putting pressure on China’s middle and lower income earners which constitute the bulk of the nation’s population.

Home prices in China have climbed to a level that some say could trigger a financial crisis, though that call has been made for the past five years.  In the meantime, municipal level banks, which also fund developers of real estate projects, have been given warnings by the Central Bank about its non-performing loans (NPLs).  Although the NPLs for municipal banks is not entirely transparent, nor is it clear that the bulk of the NPLs is due to bad real estate deals, the overall NPL number within China’s banking system is within international norms, according to the World Bank.

Still, home prices in Beijing and Shanghai have more than doubled in the past 10 years. Policymakers have tried to curb speculation and added numerous road blocks to housing, including punitive taxation and higher down payment requirements. Nothing has tamed the market.

A big price correction in the Chinese real estate market is unlikely, as this is still a country controlled from Beijing. And Beijing doesn’t want a real estate bubble to burst.

Xin Zhiming, Big Picture columnist at China Daily, wrote recently that, “As people’s hopes to buy an affordable home are dampened by rising prices, they may become less confident in policymakers, which, in the longer term, will prove a problem even bigger than real estate price corrections.”

According to the National Bureau of Statistics report, released on Saturday, all 70 cities except for Wenzhou reported gains in new home prices. First-tier cities continued to record month-over-month price hikes, new home prices in Beijing and Shanghai up over 20% from December 2012 levels.

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Update
10

7 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

7 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was broken into by ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

7 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk Seri Hishammuddin H ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the southern states last month. ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 million in compens ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minis ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an allocation of RM20 m ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Damansara Skyway (Kidex) today ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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