sky over the horizon, collapsed building couple months ago... But
nothing worse than this:
All Foreign institutional investors are dumping every single
residential commercial projects they owned since 2000. Morgan, ING,
HK's Li property... And the dumb things, the Chinese are snapping
them up in such high pricing that they are padding the pockets of
these institutional investors. In the end, it's the Chinese that are
holding the bags. These institutional investors are selling them for
hundreds of millions of RMB, after average of 6 years of rental
incomes and all. ING, the latest to dump its assets for 900 millions
after collecting about 64 million RMB annually. These properties went
to Chinese companies being looked on as priced trophies. Familiar?
Japan in the late 80's and early 90's? One economist is warning that
the Chinese property is moving in the direction of the Japanese one.
Bubble followed by long decline. I am not so sure. The Chinese is a
different bunch. A different thinking.
They buy to show off or to hold for value. If their assets drop, they
hold; they do not sell; they just collect rent waiting for the
upswing. So this market here will never go down for long. It will
pick up. I see a long term upward trend with dips of about 15% or so
on average. Scary thought. Average people can't afford to buy
properties. Parents are saving about RMB 1 million over their life
time to provide down payments for their sons and daughters. Not
enough now. A sad situation. Specially for male. For a mother-in-
law to see her daughter married without asset and only rental.
Yikes. Double pressure for the male. White collar crimes up? Maybe.
Wonder why the foreign institutional investors are dumping everything
in Shanghai? Did they lose too much money last year that they need to
recoup their cash situations? Or is that because of the recent
announcement from Chinese Central Gov't on tighter tax reporting
monitoring against foreign companies? There seems to be a vail
amongst the foreign institutional investors pushing the price up, to
make these Chinese think the assets are good buy - value, status
symbol and showing off.
It's scary to see things rising so fast so sharp.
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