2014-03-20

Downside Price Targets on Yuan Emerge; Beijing Youth Daily Calls For the Market to Regulate Housing

This one is easy to understand, an analyst at CITIC sees the yuan slipping to 6.5 later this year on the back of housing weakness. 中国房价可能承压 人民币或贬至6.5

Beijing Youth Daily printed an opinion piece calling for the government to let real estate prices fall. It says to protect home buyers and depositors, but let the market allocate resources: do not do a bailout as was done in 2008. Let the market allocate resources.

If it seems strange that the newspaper put out by the Communist Youth League in Beijing would publish such an opinion, it is worth remembering that the Li Keqiang and many other members of the reform camp came out of the Communist Youth League. Where are the real communists? Increasingly, in jail or under investigation for corruption.

房价下行预期增强,政府之手必须管住

No one knows, China's real estate will go where. Even if the future is uncertain, the government should manage their "hand" and let the market play a decisive role in allocating resources. If there is some danger of becoming real estate projects on schedule, the government should encourage disk access, safeguard the interests of depositors buyers the greatest extent.

Ningbo chiefs Hing real estate sector had run home, recently collapsed due to funding strand breaks. This leaves more than 3.5 billion yuan fangqi huge debt, which banks Qiandai 2.4 billion yuan, the illegal deposits from the public more than 700 million yuan. Xing Yun home due to falling land prices lead to serious shrinking assets, thereby funding strand breaks. Since the incident, sustained attention to the domestic media, "Xing Yun home" to some extent, has been regarded as a harbinger of China's property market risks. Combined with other adverse factors, and even some market participants worried about whether the property market in 2008 will be adjusted again.

This is the case since the first three or four lines reflect the living conditions of small and medium cities housing prices. Such high debt ratio of housing prices, sales weak, fragile financial chain. In recent years, Ordos, Wenzhou, Changzhou and so many four-tier cities Transaction downturn, real estate developers surplus. Late last year, the industry began to heated debate whether the Chinese property market which has been rumored iceberg "clicks." Some prevailing view is that the tip of the "crack" was seen in the four-tier cities. However, the prices "crack" spread rate seems higher than expected, and is currently a second-tier cities housing prices are showing signs of loosening. In early 2014, Hangzhou, some real estate lead Bargain Outlet, Guangzhou and other cities also came after the price cut. This week, Beijing Vanke [ Introduction News ] opening price of an item is significantly lower than market expectations of more than 10%. Under such a background, the country increasingly buyers wait and see mood strong, do not appear as expected in the "Indian summer" on the market in March of this year.

Rates just the real estate industry, "face", as the capital-intensive industry, "money" is what it is "in the child." Since the early macro-control, the bank can not meet the credit needs of housing prices in recent years, housing prices by a large number of financing trust products. Data show that the size of the real estate trust maturity of nearly 250 billion yuan. Last year nearly 2,000 real estate trust scale maturity billion, subject to regulatory policies, some of the housing prices have been unable to cope, leading to eight real-estate trusts appear payment crisis. Before March of this year, the country can barely shore up property prices, but the volume is up sharply shrinking. No volume, there is no capital return, which makes "tight money," the developers feel then, and let the market is more worried about the huge real estate trust the timely payment.

The market further disturbing news came. Recently, the central bank will expand the RMB exchange rate daily volatility limit to 2%, a move to enhance the devaluation expectations. Thus, in the past few weeks has experienced a wave of rapid devaluation of the renminbi, these days it is a continuous sharp decline in the exchange rate hit a new low for nearly a year. Such as the continued depreciation of the RMB, RMB assets will lead to shrinking. Meanwhile, let devaluation of capital inflows slowed sharply, which also put pressure on real estate prices. Therefore, the market is expected devaluation or punctured housing estate bubble . Under the influence of various unfavorable factors, some industry insiders recently somewhat pessimistic because of credit and other factors that once led to widespread wait, the property market in 2008, as adjusted in 2011 is not impossible.

Listed in 2010 as part of the real estate control policies, the real estate business, refinancing, and mergers and acquisitions, has been suspended for nearly four years time the Commission. However, this ban has been broken, real estate companies have recently backdoor listing, some of the listed room rate through the completion of a private placement equity refinancing. This policy change, does that mean that management has a premonition that the situation is grim? Of course, the management of market behavior "bailout" understandable. Currently, local governments need to guard against. In the pattern of land finance, local government and the real estate industry has formed a community of interests, the property once the "accident", the local government must prevent unauthorized re-introduction of tax and fiscal policies to stimulate the real estate market, the 2008 bailout to avoid a repeat.

After the international financial crisis in 2008, more than half the time, dozens of local governments have launched a massive bailout Real Estate Deal. Bailout policies, including the basis of total housing fund to finance subsidies, reduction of transaction taxes, purchase rebates, commercial loans to fund loans, and so on. The obvious consequence of the bailout, soaring prices reversed, first-tier cities is skyrocketing; endorsement of the government to do more to ignore the risk of real estate, the rapid expansion of the four-tier cities, ghost towns frequent; Chinese economy more severely kidnapped real estate.

No one knows, China's real estate will go where. Even if the future is uncertain, the government should manage their "hand" and let the market play a decisive role in allocating resources. If there is some danger of becoming real estate projects on schedule, the government should encourage disk access, safeguard the interests of depositors buyers the greatest extent. For those who ignore the risks of real estate, bankruptcy is their inevitable fate, the local government has no misuse of resources, offside bailout.

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