The Sky Is Falling on China's Real Estate

choi

(1) Jamil Anderlini, A Lofty Ceiling Reached; Chinese property: After a decade of soaring prices, signs are that the world's most populous nation faces its first real estate crash. That would be dire for other countries that rely on China to fuel their own economic growth. Financial Times, Dec 14, 2011.

(a) The teaser in the front-page top banner plugging this article: The only way is down[;] China's property bubble. Analysis, page 7"

(b) Quote:

"China's property bubble is busting,' says Andy Xie, an independent economist. From their current elevated levels 'prices may fall by as much as 25 per cent soon and by another similar amount in the following two to three years.'

"The country's 80,000 property developers own enough land to build nearly 100m apartments. Add this to vacant apartments for sale, according to estimates by Credit Suisse analysts, and China already has the capacity to satisfy housing dremand for up to 20 years.

"Chinese housing prices has soared so high and so fast that the dream of owning an apartment is now out of reach for almost anyone who does not already have one.

"Data are incomplete but analysts say the price of an average apartment in a Chinese city is now about 8-10 times the average annual income nationwide; in cities like Beijing and Shanghai the ratio is closer to 30 times. Even at the height of the US real estate bubble in 2005, the price-to-income ratio for the whole of America paked at about 5.1, while cities such as Las Vegas, where the bubble was the biggest, saw the ratio reach 5.6, according to Zillow, a real estate information company. Historically, US home prices have tended to be about three times average annual incomes and they are close tot hat level again now, six years after the bubble burst. In the UK, the ratio peaked at about 5.8 in 2007, according to Halifax, the mortgage lender.

"Government policy over the last decade set up perverse incentives that almost seem designed to create a bubble, say Chinese analysts and economists.

"Apart from pilot projects in Shanghai and in Chongqing to the west of the country, nowhere is an annual property tax levied and the property transaction tax that exists is derisory. * * * [Yi Xianrong:] "China's real estate bubble is undeniably the biggest in history but our property taxes are lower than Zimbabwe's; the situation is laughable.'


Note:
(a) An abbreviated translation can be found in

中國房地產泡沫 正破滅. 世界新聞網, Dec 14, 2011.
http://www.worldjournal.com/view ... 85?instance=instant

(b) ancien régime (n; French, literally, old regime; First Known Use: 1794):
"the political and social system of France before the Revolution of 1789"

like Chinese say of Republican era as 旧社会/ 旧中国.
(c) I can not find the Chinese translation for Versailles Residentiel de Luxe La Grand Maison.

World Journal translates it as 凡爾賽豪華住宅大廈, whose simplified Chinese version (or parts of it) does not appear anywhere else. World Journal does not even hear of 易 宪容, and transliterate the English name as 易先榮. (Does World Journal translate with a machine?)

(d)
(i) derisory (adj):
"1: expressing derision : DERISIVE
2: worthy of derision; especially : laughably small <land could be bought for a derisory sum>"
(ii) derisive (adj): "expressing or causing DERISION <derisive laughter>"

www.m-w.com

(e) YI Xianrong  易 宪容
(f) CAO Jianhai  曹 建海
(g) TAO Ran  陶 然 (中国人民大学经济学院教授)
(h) One should read the article (a page long) if he owns, or intends to buy, a house in China.

(2) A side bar to the above article:
Homeowners in a Land That Had No Word for Mortgage; Housing history.

Quote:

"'I couldn't find a translation for "mortgage loan"; we just didn't have a word for it in any of the dictionaries,' says Mr Li [Fuan] * * * Eventually he tracked down an English-Chinese dictionary printed outsidwe the People's Republic of China and use the word he found there--anjie--to describe a pe4rsonal bank loan for the purpose of buying a house.

"Before 1998 China did not hae a residential real estate market to speak of

Note:
(a) LI Fuan/ China banking Regulatory Commission  李 福安/ 中国银行业监督管理委员会
(b) Obviously Mr Li did not consult a dictionary printed in Taiwan. 按揭 was unheard of in Taiwan (when I was there); we called/call home mortgage 房屋貸款. Indeed I wondered why Chinese used this term.

“按揭”一词是英文“Mortgage”的粤语音译.