Dose

Fairfax: The Yellow Peril is upon us

512 posts in this topic

Now Singapore!    -Admittedly I am behind posting this but interesting that the same Singapore meme has turned up in Canada as well.   The China story is old.  Who's next?  My bet is India.

 

http://www.smh.com.au/business/property/singaporean-investors-hungry-for-a-piece-of-the-australian-housing-market-20140725-zsvj9.html

 

 

‘‘Singaporeans are hungry for Australian property,’’ says Adam Sparkes, ​director of sales at property developer Crown Group International, which has $3.5 billion in development sites across Australia.

The Singaporean sales pitch comes amid increased focus over offshore buyers snapping up local property. This is stoking fears that prices in an already heated market could be pushed up further.

 

 

Garth Grumblebum is not convinced re same in The Great White North.  http://www.greaterfool.ca/2014/08/01/hater-house/

 

 

The xenophobia and hating rampant in Van these days is the ugly weed growing from the fetid ooze of economic stress caused by an out-of-control real estate market. But as I’ve shown in the past statistically, foreigners didn’t do this. They account for a small fraction of overall sales, as in Toronto and Montreal. When over 90% of transactions are done by locals in a city where average SFD homes trade for over $1 million, guess who’s to blame?
Edited by Dose

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7.30 Report dissects foreign property debate

 

shock, horror - who could have guessed it!  :o

 

...Gone is the ruse that foreign investment is not a significant factor, with virtually all participants acknowledging that there is illegal activity going on, it is having a material impact on prices, and Foreign Investment Review Board (FIRB) monitoring has been delinquent.... 

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Yet another example of 'lazy' journalism stating that there is an RE bubble!

 

 

My first BF was a journo - they don't have enough time to use anything other than the ctrl, alt, a, c, v keys on the computer. 

 

RBA will restrict banks lending policy - ok and they'll raise the GST to 90% - neither are under their control.

Govt,s, but not our reserve bank printing money - Got it. Our reserve bank is our govt.

Nice hair do David!

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Experts... Sauls back at the NG argument again... It must be Spring. 

 

House prices: Negative gearing 'a bigger problem' than Chinese investment
 

 

 

Experts say negative gearing is having a greater impact on Australia's rapidly rising house prices than Chinese investment.

But that statement comes with a qualification – it is very difficult to know what the level of Chinese investment in Australia's residential real estate is because authorities do not have data that breaks things down that much.

One of Australia's most respected economists on Tuesday called for the Abbott government to rein in surging house prices in Australia's capital cities by putting an end to negative gearing for new investors.

Saul Eslake, chief economist from Bank of America Merrill Lynch, said negative gearing was contributing to the inflation of property prices to the point where Australians could find themselves in a "bubble situation."

 

 

Right before the RBA actually do anything precipitate to cool the market RPData figures show that any action is unnecessary. Phew! 

 

House price growth flatlines in September

 

 

House price growth across the country cooled a little in the quarter just ended, after a virtually flat September, according to the latest house price index by sector monitor RP Data Corelogic.

The monthly statistics are likely to be welcomed by the Reserve Bank of Australia, which is worried about housing bubbles in Sydney and Melbourne.

Article%20Lead%20-%20wide6160620110ogn6i

 

 

Even Sydney was relatively subdued in September, with dwelling price growth of 0.8 per cent, ahead of Brisbane with a rise of 0.7 per cent and behind Adelaide with 0.9 per cent. All the rest of the capitals reported value declines in September, leaving growth across the country at 0.1 per cent.

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0.8pc per month is subdued?

10pc per annum is in my view enough to warrant change.

I just worry now how they will implement a change to negative gearing. Will it be you have untill 30th June 2015 to get your big tax break for life? We will be bombarded by property spruikers for the next 8months telling us to get in or miss out? One last surge in prices before a massive rout in prices?

That said I cannot think of a benign way of changing this policy given the profound impact it has on house prices.

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SMH: As China's real estate market cools, the nation's new property moguls look to Australia

 

 

Beijing: To set foot in a real estate expo in China is to run a frantic gauntlet of sales staff thrusting glossy pamphlets into every open hand they can find.

 
Vying for the attention of cashed-up investors is always competitive at major property events; with hundreds of property developers spruiking dreams of home ownership – and not just in China.
 
In exhibition halls in China's major capital cities, prospective buyers are just as likely to come across promoters for house and land packages in suburban Melbourne, or off-the-plan inner-city apartments in central Sydney, as they are for a luxury development in China's southern beachside resort of Sanya.
 
But after years of heady growth spurred building – and buying – of high-rise apartments on a mind-bending scale, property prices in China have slid backwards for five straight months, prompting fears of a deeper price correction.
 
Althoughmany property analysts remain confident the government is able to intervene if needed to prevent a full-blown property crisis, the sector is routinely fingered as a major risk factor amid the slowing trajectory of China's seemingly inexorable economic rise.
 
"Chinese property prices are at this critical juncture," Wang Peng, the managing director of property developer Hanya Federal, told Fairfax Media. He says prices in second- and third-tier cities – essentially those outside Beijing, Shanghai and Guangzhou – are especially fragile given local developers continue to build.
 
"If you're a rational investor, you'll be selling all the houses you don't need. If you don't, in a few years you won't be able to," he says. "Many, many people are selling their house in China and buying elsewhere, maybe in Australia, maybe in the United States."
 
The evaporation of easy returns has seen top-end property developers earnestly branching out away from Chinese real estate, and seen some of the country's most prolific businessmen invest in Australia.
 
Property mogul Wang Jianlin, a former military officer, who owns the most movie screens across the world thanks to the acquisition of the US-headquartered AMC Entertainment, last year flew in the likes of Nicole Kidman, John Travolta and Leonardo DiCaprio to celebrate the ground-breaking ceremony of his Qingdao Oriental Movie Metropolis – a movie studio he hopes will help China surpass Hollywood as the centre of the film universe.
 
Recently bumped from top spot of China's rich list by tech giant Alibaba founder Jack Ma, Wang established an Australian arm of his sprawling Wanda Group empire in August. Funded with an initial cash chest of $1.7 billion, Wanda Australia's first foray will be a joint venture with fellow Chinese group Ridong to develop the $1 billion Jewel hotel and apartment resort complex on the Gold Coast, amid a string of acquisitions in London, Madrid and other parts of Europe. Wanda has the stated ambition of becoming the largest owner of five-star hotels across the world.
 
"In the past five years, Wanda's income has grown at [an average of] 35 per cent a year," Wang said last year. "I think this is a normal speed, but some feel it's too fast. But if we took regular steps to grow, we wouldn't be able to become No.1 in the world."
 
Even more diverse is the extraordinary spending spree of Xu Jiayin, chairman of conglomerate Evergrande and co-owner (with Jack Ma) of arguably the richest football club in Asia, Guangzhou Evergrande Taobao.
 
Just last month, Xu, also known as Hui Ka Yan, caused a stir when he jetted into Australia with his entourage in a private Airbus A319, scouting for deals on the Gold Coast, and in Brisbane and Sydney, according to sources.
 
Evergrande this week launched its own infant formula after acquiring New Zealand dairy producer Cowala Dairy. It is spending 10 billion yuan ($1.86 billion) to take on China's cooking oil and grain markets – ventures which have already been prominently advertised on Xu's Guangzhou football club jerseys.
 
Evergrande has also launched its own brand of bottled water and an expansion into solar energy and wine-making, all in the space of a few months. 
 
"They're taking the spray-and-pray approach," says Michael Cole, a Shanghai-based real estate analyst. "They're trying out a bit of everything to see what they can do with their cash, now that they no longer get the returns they used to on real estate development."
 
Financial analysts have cautioned investors against Evergrande's aggressive diversification strategy, concerned with its cash-flow and rising debt.
 
Credit ratings agency Fitch downgrading the company's credit rating to BB- after noting a "large increase in its net debts", following record land acquisitions last year and this year's investments in an array of businesses.
 
Goldman Sachs said this week that investors should avoid Chinese developer bonds altogether, as builders in the world's second-largest economy increase note offerings to help refinance some $US13.4 billion worth of debt due next year.
 
Not helping sentiment was the shock arrest last month of Agile Property's Chen Zhuolin on corruption charges, causing shares in the Chinese real estate developer to plummet.
 
Foreign lenders in China have already been stung by a string of suspected fraud cases and problem loans in the country as Beijing investigates company executives and seizes assets in a crackdown on corruption.
 
Fairfax Media has learnt that Xu himself has been interviewed by China's Central Commission for Discipline Inspection, according to three sources: a senior property executive, a person with knowledge of corruption investigations in Guangdong, and a businessman with ties to China's elite.
 
Xu was questioned in relation to his close ties with Wan Qingliang, the party boss of Guangzhou who was arrested on corruption charges in June and expelled from the Communist Party after a party conference last week.
 
There is no suggestion that Xu has acted improperly or that he faces corruption charges himself. Evergrande declined to comment.
 
But as word spreads within the tight-knit business community in southern China, it appears Xu's seemingly high-risk expansion strategies can in fact act as insurance. By gaining an international profile, and by virtue of his large debts owed to state-owned banks, observer believe he can become "too big to fail".
 
"What is the return of the deal in terms of the investment return, and what is the return in terms of the PR value of the company?" Cole says. "The international deals do help quite a bit."
 
Back at the property expo in Beijing, Wang Peng, remains busy convincing interested investors to sell in China and buy in Australia.
 
Wang himself, who amassed a modest fortune by riding China's property boom, has traded in his Beijing apartments for an apartment in Sydney's Ryde, and a house and land package in Point Cook, on the western fringes of Melbourne.
 
Backed by a multibillion-dollar head company, Hanya has launched a 110-apartment development in Melbourne's Box Hill aimed at convincing other Chinese investors to make the same switch.
 
Demonstrating the buying power of cashed-up Chinese investors, Wang says Australia is popular because property prices are perceived as "cheap" compared to what is available in the big cities in China.
 
Australia also has lower home loan deposit requirements compared to China, where banks often require around one-quarter of the property's value upfront, amid tightening lending conditions.
 
"The amount of Chinese developers entering the Australian market is increasing exponentially," Wang says, "and the only reason these businesses dare to venture into this market is because there is the scale and the demand."

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Same publication, same day.  Fairfax needs to work out its ...issues.

 

http://smh.domain.com.au/real-estate-news/auctioneer-slams-a-current-affair-20141031-11ejsr.html

 

 

The auctioneer who featured in a tabloid TV program about the prevalence of Chinese buyers at auctions says he was misrepresented.

Robert Ding appeared on Channel Nine's A Current Affair this week conducting an auction in Mandarin. The article was named 'Chinese buyers taking over the housing market'.

The article blamed booming house prices on Chinese investors, with the reporter introducing her story by suggesting: "The real ones who are missing out are first-home buyers."

But Mr Ding said this had little to do with the property he was selling: a large block that ended up selling for almost $1.4 million that was always going to go to property developers.

"They interviewed me for an hour but only used five seconds of it, so obviously they didn't agree with what I said," Mr Ding said.

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Is it fairfax? Loads of other media claim that it's not foreign money buying suburban property. It's local chinese. How can we differentiate?

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Is it fairfax? Loads of other media claim that it's not foreign money buying suburban property. It's local chinese. How can we differentiate?

 

They can use a relative/friend with residency to buy on their behalf.

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For people that believe that foreign buying makes no difference: if a foreign buyers buys a home then by definition this means that they offered more than anyone else (local buyer or other) for that home.*

This is obvious, people accept the highest (or only) offer for their property. If the foreign buyer had not made that offer then either the sale price would have been lower or the property would not have been sold.

How this fails to move the market I do not understand, even though I am well drunk. the only question is to what degree these buyers "move the needle". if memory serves, the FIRB reported 6 billion in Chinese (or was it total foreign?) sales last year, however they did not reject any sales or do any investigations into the residence status of alleged local buyers so we have no idea of the true number.

All we know is that there were 6 billion+ of foreign sales that increased sales prices last year and that I am drunk.

*except for the edge case scenario where a lower price is accepted for an unconditional/cash offer

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Hmmm.

Foreign chinese - Local chinese.

Isn't it the case that if foreign chinese purchase they have to rebuild?

Yet if local chinese purchase they are under no such obligations.

I would wonder then at the need to differentiate between the two, and Mr Ding is very adamant that these are "local" chinese upgrading. Ok, so where are they getting all their funds from if they are true dyed in the wool aussies, to afford such properties if the local "aussies" (I use the term generically) can't possibly afford such properties.

Its all bunkum.

All spin.

And who cares as long as we keep getting the high prices for our pieces of steel, wood and concrete.

Little do they realise that what happens at the high end of the market filters down to the lower end. But that would be lost on these high flying real estate agents who couldn't  give a flying fling about the working class.

Bah. Pathetic really.

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It can still be taxed... if the lap boys (and girls) in Canberra have a spine.

 extra land tax on undeveloped land would resolve land banking problems very quickly!

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 extra land tax on undeveloped land would resolve land banking problems very quickly!

There's a developer in QLD who's sitting on enough land, as part of a 'master planned community' for ten years ++ worth. He's got a couple of bee hives on it so can claim it's primary production land. 

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There's a developer in QLD who's sitting on enough land, as part of a 'master planned community' for ten years ++ worth. He's got a couple of bee hives on it so can claim it's primary production land. 

What would the bees bid?

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