Chinese property bubble to burst in next 9-12 months
We believe that the chinese residential property market bubble will burst in China in the next 9-12 months.
Why do we think this will happen?
1. Chinese commercial banks have now stopped lending to developers which is the first sign the party is now over
2. Chinese developers have too much land on their balance sheets, similar to the U.S. before its housing market tumbled
3. Developers are severely squeezed and cannot get credit and are now seeking it on international markets or forced to sell at low prices
4. Oversupply of units will be dumped on market at low prices and will be glut forcing all prices downwards
5. China’s home prices rose in 67 of 70 cities monitored by the government last month (Adam Johnson, Bloomberg)
6. The government is giving subsidies to developers to build to keep economic growth growing
7. Interest rates and inflation are rising
8. This is a perfect storm for the Chinese Property Market and one which we believe will crash badly in the next 9-12 months.
What are your thoughts? Please post comments below
Why do we think this will happen?
1. Chinese commercial banks have now stopped lending to developers which is the first sign the party is now over
2. Chinese developers have too much land on their balance sheets, similar to the U.S. before its housing market tumbled
3. Developers are severely squeezed and cannot get credit and are now seeking it on international markets or forced to sell at low prices
4. Oversupply of units will be dumped on market at low prices and will be glut forcing all prices downwards
5. China’s home prices rose in 67 of 70 cities monitored by the government last month (Adam Johnson, Bloomberg)
6. The government is giving subsidies to developers to build to keep economic growth growing
7. Interest rates and inflation are rising
8. This is a perfect storm for the Chinese Property Market and one which we believe will crash badly in the next 9-12 months.
What are your thoughts? Please post comments below
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