“Birdcage” apartments with an area of 6 square meters sold for 150,000 yuan per square meter this weekend. The rooms are in a building built as a hotel on Shahe East Road, in the Nanshan District. A common kitchen area and bathroom is available.
Surveillance camera caught the shocking moment a new real estate in east China’s Hangzhou city opened for sale on September 24. The spree was prompted by the new restrictions on Monday which prevent people born outside Hangzhou from buying more than one property.
The said real estate was sold out in a mere couple of hours, according to reports from local media.
And while the bubble rages, we await the prudential tightening, from Natixis:
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Over the weekend, Jun Ma, the Chief Economist of the PBoC, described the Chinese property market as bubbly, implying that monetary policy would not be laxer as that may fuel an even larger property bubble. In Q1 to Q3, the property market has cushioned economic slowdown. Yet on the flip side of the coin, rising property prices make policy makers worry. In response, some local governments have resumed restrictive buying policies. We have shown in this note that the frothy residential property market has supported the real economy in manufacturing and retail sales when economic growth has decelerated in H1. Mortgage loans have also balanced the credit risk of bank book from increasing corporate credit risk. This forms the basis of our view that although some cities have resumed purchase restriction, we do not expect a holistic approach to be applied to the whole country. Divergence of home prices among different tiers of city could emerge in the coming months based on different levels of self-use demand. We expect Tier 1 home price would continue to rise but only moderately at 5% to 10%, while Tier 2 and Tier 3 home prices might not be promising.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
