Chinese property bleeds on

Friday, 5 September 2014

Cross-posted from Investing in Chinese Stocks.

In Beijing a developer had a midnight opening for a property, selling out 80% of the apartments. Prices are down 20% from the advance list price in June. 北京楼盘连夜开盘去化近8成业内称“金九”大战开启

In Guangzhou, buyers are walking away from existing home purchases as prices drop. When prices were rising, many homeowners would break a contract in order to get a higher price; now buyers are walking away as better deals come along. 广州业主降价近70万卖房有买家不惜赔钱毁约

In Hangzhou, buying regulations are being relaxed even further and the government is offering a subsidy of ￥30,000 to home buyers. Developers do not expect the policies to have much effect. 长三角多地大尺度救市对楼市拉动作用或有限

There have been rumors of banks relaxing mortgage terms, but there are lots of “additional terms” that results in very little actual mortgage easing. In reality, the banks are trying to lure the good credit risks in a tight market. 房贷利率松绑假象打折背后往往有“附加条件”

Also, regarding Sky City in Changsha. The latest news is this: Construction will begin when the government approves it. 张跃:世界第一高楼天空城市何时开工要靠政府 The article is long and is actually a somewhat hostile interview of Zhang Yue, the man behind Sky City, as the reporter tries to get him to discuss the many issues thwarting his project. Google Translation link: Zhang Yue: world’s tallest building

Finally, China State Banks Report Surge in Soured Loans. Still not a major issue, but remember there are Tricks For Hiding NPLs. As long as the economy doesn’t weaken substantially, banks will extend and pretend and try internal workouts before finally giving in and recording a bad loan.

The five lenders also reported a total of 423.49 billion yuan of nonperforming loans outstanding at the end of June, up 21% from a year earlier. They also reported a slowdown in profit growth.

Overall bad loans increased ￥77 billion 上半年不良贷款增771亿元 58亿资金暂别银行股:

Statistics from China Merchants Securities shows that six listed banks non-performing loans at the end of June were 558.2 billion yuan, 77.1 billion yuan higher than the beginning of the year.

…In the first half listed banks wrote off bad loans worth 65.6 billion yuan, which is about double the figure from last year.

About the author

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.