- Second-hand home sales in Beijing fell almost 70 percent in January from the previous month, after the central government issued several policies aimed at curbing prices, the Shanghai Securities News reported today.
- Home sales in Shanghai fell 51 percent in January from December, the Shanghai-based newspaper said in a separate report.
I will give the Chinese credit... unlike their American peers at the Federal Reserve who apparently have the eye sight of a 108 year old man and claim they cannot "see bubbles forming", the Chinese are at least proactive when they see assets inflate to levels they don't approve of. Perhaps Lasik surgery is more advanced in China than the US? Or India? [Nov 28, 2008: NYT - How India Avoided the Crisis] Or just about any country not named Britain or Spain. It shows once again the difference in cultures - one proactive, one reactive (and only reactive in dire emergency because of a dysfunctional leadership). In the US we are told bubbles are impossible to see by our
About 2/3rds of the way through January, reports surfaced that China had told many of its major banks to effectively stop lending for the balance of the month. Specific to property, there appear to be more clamps coming... here is a story on property loans & 3rd mortgages. 3rd mortgages? How did the financial innovators at Goldman Sachs not come up with this first? And please tell me whatever Chinese person who came up with this innovation was paid at least a $65 million bonus as is appropriate for such an 'advancement'...
- China’s government, seeking to stem property speculation, told banks to raise interest rates on third mortgages and demand bigger down payments for such loans, a person with knowledge of the matter said.
- The China Banking Regulatory Commission warned lenders of the risks associated with “hot money” flowing into the property market, the person said, requesting anonymity because the agency hasn’t published the measures. Mortgage defaults in China are rising, the person said without giving figures.
- The regulator also told banks to stop granting new loans to developers found to be hoarding land or intentionally delaying property sales, and to take measures to make sure existing advances are repaid, the person said. Banks were told they should reject loan applications from people buying homes for “investment and speculation” purposes, the person said.
- An index tracking property companies traded in Shanghai fell to a nine-month low today on concern the government will tighten real-estate credit to prevent a bubble from forming.
- The government last month raised the amount of money banks are required to keep as reserves and re-imposed a sales tax on homes sold within five years of their purchase.
- Almost 40 percent of buyers of luxury residential properties worth more than 10 million yuan last year in Shanghai were from overseas, the person said. The CBRC found one case where 38 foreign citizens who never entered China managed to take out mortgages from a bank in Shanghai through their agents and lawyers, without providing necessary documentation, according to the person.
Ok I made that last bit up... the rest is true. ;)