China faces subprime credit bubble

Looks like the money machine in China is showing signs of toppling under it’s own weight:

The audit office said the loans have reached $1.7 trillion (£1 trillion). While some of the money has been used to finance much-needed investments in water systems and roads, a large part has fuelled unbridled construction with a dubious rate of return.
The local governments depend on land sales for 40pc of their revenue so the process has become incestuous and self-feeding. Such reliance on property sales revenues has greatly aggravated the post-bubble crisis in Ireland.
Mr Cheng said China is entering a “very tough period” as growth runs into the inflation buffers, threatening the sort of incipient stagflation seen in the West in the 1970s and leaving the central bank with an unpleasant choice. “The inflation rate and the growth rate are conflicting with each other: it is very troubling,” he said, describing what is known to economists as the Phillips Curve dilemma.

Full article here.

64 Comments
newest
oldest most voted
Inline Feedbacks
View all comments
Inventory
Inventory
9 years ago

Wow!! Look at West Van and North Van! Sept 19, 2011 Richmond New Listings 44 Price Changes 14 Solds 17 Vancouver West New Listings 63 Price Changes 26 Solds 27 Vancouver East New Listings 24 Price Changes 11 Solds 12 North Vancouver New Listings 29 Price Changes 6 Solds 3 Burnaby New Listings 46 Price Changes 22 Solds 9 Coquitlam New Listings 32 Price Changes 12 Solds 9 West Vancouver New Listings 13 Price Changes 4 Solds 1 Ladner New Listings 2 Price Changes 2 Solds 2 Port Coquitlam New Listings 8 Price Changes 5 Solds 5 Maple Ridge New Listings 12 Price Changes 16 Solds 4 New Westminster New Listings 13 Price Changes 4 Solds 3 Pitt Meadows New Listings 1 Price Changes 1 Solds 2 Port Moody New Listings 24 Price Changes 7 Solds 1 Squamish New Listings… Read more »

fixie guy
fixie guy
9 years ago

@30 whydoItry: True that, the world will be much better off when the bitter parricidal sociopaths take control.

RippedtoShit
RippedtoShit
9 years ago

Hong Kong Developers Set to Accelerate Sales

from bloomberg.com, fyi

RippedtoShit
RippedtoShit
9 years ago

18000 this month?

Or is that too much to ask….?

I'm hearing from some developers/lenders that things are slower out there – they are hopeful that Chinese buyers start showing up in buses, as there is a growing sense of fear building….from what I can gather.

McLovin
McLovin
9 years ago

I love this trend of 200+ net new listings days.

Li Kai Shing
Li Kai Shing
9 years ago

Hoo boy…

Another $700,000 vehicle caught speed racing !…..Hwy 99

Obviously from Whalley Newton nouveau riche !

PS Sure popped a nice wheelie !!!!

http://www.bclocalnews.com/news/130149033.html

Best place on meth
Best place on meth
9 years ago

Sept. is on pace for 6008 listings, 2286 sales and 38% ratio.

jesse
9 years ago

@white payer: Ah I see the Rich Chinese are the problem, never mind I know dozens of ethnic Chinese and non-ethnic Chinese who have bought in the last five years. I'd like to think they bought under their own free will but those HAMmers are a wiley bunch, maybe they forced them to take on $700k VRMs because…. who knows?

Girlbear
Girlbear
9 years ago

@MOO: Yes, and that house in 4700 block of west 4th is a spec house. That's quite a gamble in this market!

MOO
MOO
9 years ago

People in this city are idiots.

CASE IN POINT 1:

4745 West 4th Avenue – MLS #V911251 – $5.39 million + $3.5 million to finish construction of 8500 sq. ft. house

Listing says: "School Catchment: Lord Byng Secondary & Queen Mary Elementary"

HINT: If you can actually afford an $8.9 million house, you can also afford $20K/year to send your kids to private school.

4684 W 8th Avenue – MLS #V911267 – $3.19 million house

Listing says: "540 sq ft laneway house for extra income". Also comes with basement suite.

HINT: If you can actually afford a $3.19 million house, you don't need extra income from strangers living in your backyard and basement.

Best place on meth
Best place on meth
9 years ago

Looks like we'll be having a 17K party after all.

white payer
white payer
9 years ago

@jesse:

The Rich Chinese who lived in Canada for weeks, months or years make most of their money in China and pay no taxes while abusing the canadian social net.

I guess you can call them locals, but they never did or never will contribute to the "local" economy or a "local" way of life apart from blowing RE values through the roof. They are 100% Chinese with Canadaian passports, that's who they are.

paulb.
paulb.
9 years ago

Wow!

New Listings 319

Price Changes 149

Sold Listings 104

TI:16775

If you like the stats updates please “like” our Facebook page http://tinyurl.com/paulandlauren

Website http://www.laurenandpaul.ca

jesse
9 years ago

@Easter Island: "If it weren’t for the Chinese trying to get one foot out of their own country, the prices would likely be half of what they are today" I have to disagree with this one. How many sales are to "Chinese" and how many to "everyone else"? Who's Chinese anyway? Someone who's been in Canada for 5 minutes, 5 months, 5 years, 10 years, or 20 years? Yes buyers of Mainland Chinese descent who have recently immigrated are buying at high prices, but most buyers are locals most have been in Canada for years, and my bet is most have few direct economic ties to Asia. Still, if the HAM theme resonates it must be true, never mind everyone else is buying too. And yes if China hits the skids Vancouver's prices will drop. Doesn't mean it's really because… Read more »

Easter Island
Easter Island
9 years ago

http://www.wealthdaily.com/articles/canadian-real

"Canadian Real Estate Bubble Masks Massive New Chinese Mega-Trend"

"The Vancouver real estate bubble is a perfect example. If it weren’t for the Chinese trying to get one foot out of their own country, the prices would likely be half of what they are today."

Best place on meth
Best place on meth
9 years ago

West side wins the SFH listings derby today with 23 new listings vs 6 sales.

Richmond comes in 2nd with 20 listings and 5 sales.

A close 3rd is North Van with 19 listings and 2 sales.

It was another exciting race down to the wire as they all try to be the first to the exits.

Li Kai Shing
Li Kai Shing
9 years ago

@real_professional:

Hoo boy….

Opening act for Whalley Newton jokes !!!!

real_professional
9 years ago

@ paradox That is just wrong, I would speak to the principal and if nothing happens go to the superintendent! All instruction should be in English or French unless it is in a private school. That newton area has really become an immigrant ghetto. Alot of new arrival indians move there, although, last time I drove through the area there seemed to be alot of other immigrants as well. (FYI to any readers – I am an Indian, speaking from experience) But one thing is almost certain, the people in that neighbourhood are mostly "fresh" immigrants, in that they just arrived. Most of the kids in your son's class are probably first generation at best. The funny thing is, second generation or older first generation indians really look down at Newton and are trying to escape to, White rock, Langley,… Read more »

/dev/null
/dev/null
9 years ago

@patriotz: Looks like the options are a $45k lump-sum (taxable) for a DP, forgivable over 5 years, or $50k of interest payments over 5 years (taxable depending on rate as you say). So it seems to be a direct benefit and there is no expectation of repayment. But at least the university isn't on the hook for a huge mortgage.

Sounds like a great deal, except that I would need 1)Vancouver prices to decline to a point where I'd actually purchase a house and 2)get tenure. Probability = approximately zero.

Meth man's live
Meth man's live
9 years ago

@Best place on meth:

Not possible, Russians are already drinking at maximum capacity

=======================

Dam rights !!!!

Wait till happy hour !!!

Best place on meth
Best place on meth
9 years ago

@Manna from heaven:

Not possible, Russians are already drinking at maximum capacity.

Manna from heaven
Manna from heaven
9 years ago

Regarding smoking, I remember having a good laugh when I saw this headline last year.

'People should smoke and drink more’, says Russian finance minister

Russia’s finance minister has told people to smoke and drink more, explaining that higher consumption would help lift tax revenues for spending on social services.

http://www.telegraph.co.uk/news/worldnews/europe/

McKenzie Brothers
McKenzie Brothers
9 years ago

@whydoItry:

Don't include back bacon…don't forget about beer (not wussy micro brew shite)!

jesse
9 years ago

@patriotz: "So there isn’t really much a saving in medical costs"

Unpopular, but fatal diseases contracted by smokers have been shown to be more acute and with less long-term chronic costs. Don't have the study in front of me but it didn't go over well, even if it's true.

VMD
VMD
9 years ago

@bubba:

Eating take-out lunch while browsing VCI during my lunch break (Every lunch break), while concurrently having multiple tabs open on various news sites.

Good de-stresser in between patients to stay grounded to the 'real world' : )