Beijing Existing Home Sales Up 86.7%, Reservation Numbers Now Cost ¥1500

Last week it was reported that scalpers were charging ¥1000 yuan for reservation numbers at registry of deeds. See: Transaction Tax Cut Spurs Bubble Activity in Beijing: ¥1000 For Reservation Number

Now that number has climbed 50% in a week as the frenzy grows, for a ticket that will get you service on March 7 to March 11. Properties are flying and bubble thinking predominates:
March 1 at 15 am, the reporter arrived at Shifoying Road, Chaoyang District, Beijing Chaoyang District Real Estate Registration Centre. Transfer the driveway in front of the hall full of parked vehicles, the original narrow intersection directly into the "blocking point." Located at the north side of the service window the lines were 10 meters long, some owners come under the leadership of the agency staff, some come alone, waiting in line checking that their paperwork is complete, while looking impatient.

Transfer hall is "overcrowded", and called the number waiting for dozens of owners discharged directly outside the building built in the greenhouses. When Ms Wu, who lives in Changping is one of them, talked about her first time to buy an existing home experience, she said: "I feel completely too late in planning, I looked at two homes, the agency kept calling, 'If you don't buy it will be gone' 'I do not buy the price will go up,' and finally muddleheaded I bought the house."

Ms Wu at the end of 2015, on the Internet spotted two houses outside the north 5th ring, including a loft she favored. "November is still time to see 3.60-3.65 million yuan, soon after the New Year it rose to 3.8 million, almost every week the price went up." Facing rising prices, Ms Wu chose the next best option, a 3.00 million yuan house in the same area.
iFeng: 京二手房过户现预约黄牛号 价格炒至1500元

Another article says the "ultimate model" for house flipping is going viral on social media: buy a house and then fraudulently borrow against it (rehypothecating it?) in order to get fresh capital to flip more houses and stick the bank with the risk if you lose. There's no example of anyone actually doing this in the article, but it is used to describe the current herd mentality. A parallel is drawn to the stock market bubble last year: everyone is focused on how much they can earn by investing in houses. The path now chosen, reflexivity kicks in and rising prices begets higher prices, until the bubble bursts.
The tragic story of the stock market too has learned the majority of individual investors, and now, it seems that investors will be first-tier cities and some second-tier cities prime pushed up prices, as the property of increasing the value of the last channel. The worst is that a considerable number of investors so far, has not been established principles of risk and return on investment, etc., always fantasy flourishes, but do not want to deal with ahead of the corresponding risk of psychological and financial preparation. Resulting paradox, seemingly the most risk-averse group of people, often the most likes to explore various avenues riches, gossip and desperate. Risk arbitrage is similar to trick banks threw, just aimed its Vital. The result is that these people tend to lose the most. Last year bull market, those engaging in "two financial" investors continue to increase leverage, and today have the "not as good as the real estate and a half years of work" mentality panic room who is simply driven by the same fate of the sheep, toward a cliff without knowing it.

In fact, one or two rumors is not terrible, terrible is real estate fell into the "lock-in effect" in. Economist North believes that there is a self-reinforcing mechanism of institutional change, once embarked on a path, it will continue to strengthen established in the future direction of development, even if the road has been wrong.

The housing market is currently on the existence of a similar crisis when all the talk about how much money can be made from investing in houses, greed drowns fear in the market, first-tier cities, too, cannot become the last bastion.
First-tier houses have replaced A-shares as Shenzhen home prices do a Baofeng. Remember the stock that was limit up day after day during the final crack up boom? It has been halted at ¥95 a share since October for a reorganization (暴风科技:重组方案仍需完善 股票将继续停牌), down from its high ¥136, but still way up from its less than ¥5 offering price. The company says earnings rose 313% in 2015, giving it a P/E of 150 based on that last trade in October 2015.

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