Andy Xie says China Property Market has peaked and will fall

[Dennis Ng]

this info about Andy Xie ws taken from wikipedia:

Andy Xie (谢国忠) (born 1962) is an independent economist based in Shanghai, and the former Morgan Stanley star chief Asia-Pacific economist [1] famous for his contrarian and provocative views [1]. He left Morgan Stanley abruptly in October 2006 [2] when an internal email[3] that he penned was leaked out. He derided Singapore as a money laundering centre for Indonesia, and the ASEAN group of nations as a failure.

谢国忠：未来五年大城市房价平均跌一半

　　来源：财新网 作者：谢国忠

　　我现在正式通知大家，楼市已见顶，接下来将逐步下跌，熊市将持续五年，大城市的平均房价可能会跌一半以上

　　【财新网】（专栏作家 谢国忠）又到了吃大闸蟹的季节。

　　煮螃蟹，首先你把蟹放在冷水锅中，它们会觉得又回到了湖里，浑然不觉危险。然后，盖下沉重的锅盖，开火。这时，你可以听见它们抓挠锅壁的声音，开始轻，然后拼命挣扎，然后轻，再后就偃旗息鼓了。几分钟后，你打开锅盖，蟹壳已成金黄。这时，你就可以蘸着醋姜，享受美味了。

　　现在，中国的炒房人就像在冷水锅中的螃蟹。他们感觉很好，会时不时地伸伸腿。看不到任何危险。殊不知，自己已经被人盖上锅盖、下面点上了火。马上就要被煮熟了，却尚未发觉。

　　今年4月，我告诉过读者，楼市泡沫即将破灭时，就会通知大家。现在，楼市已经见顶。在今年余下的时间内，它将逐步下跌。到2012年，人民币升值预期可能会逆转，资本会流出，届时楼市会加速下跌。

　　中国已进入房地产熊市，将持续五年时间。大城市的平均房价很可能会下降一半以上。土地价格将下降更多。在泡沫最大最疯狂的浙江省，价格可能会下降80%甚至更多。

　　工资与租金
　　为什么房价会下跌这么多？当泡沫泄气的时候，房价必须下降到工资和投资收益可以支撑的水平。在中国的房地产市场，现在的租金回报率不到3%，它必须回到5%以上，每平方米的单价则不应超过两月的平均工资。

　　在泡沫时期，准确断言市场顶部是一门艺术。人类跟风投资的弱点是泡沫的助推剂，总到最后时刻才能醒悟。泡沫破裂通常由资本退潮触发。有时，超量供应会超过投机性需求，足以吓跑投机者。多数泡沫是突然破裂的。但也有个别泡沫是逐渐泄漏的。

　　1997年，外国资金撤出推高了利率，导致香港楼市泡沫破灭，顷刻间，吸光了这个赌场的所有资金。2000年互联网泡沫的破灭，是因为那些上市公司的大股东们手中的股票限售期刚过即大规模抛售，惊醒了投机者。而2007年美国楼市泡沫破灭，是因为次贷到期了，投机者发现还不上钱。

　　逐渐泄气
　　房地产泡沫的泄气可以持续很多年。20世纪90年代日经225股票平均指数崩盘后，日本楼市泡沫还膨胀了两年。而且它也不是瞬间破灭的，而是在其后的二十年中，以每年大约8%的速度下跌。台湾受日本影响，房价也在缓慢下跌，直到中国疯狂的投机者复苏了房地产市场。

　　1998年，中国的房地产泡沫也破灭了。三年内，上海房价下跌了三分之二。广东和海南的烂尾楼随处可见。再近点说，上海的房价从2005年5月至2006年底下跌了三分之一。很多商业区的楼盘甚至下跌了一半。

　　现在的泡沫始于2007年，由宽松的货币政策和人民币升值预期催生，我原以为，它也会在瞬间破灭。但最近的事态发展改变了我的观点。此次的泡沫可能不会瞬间破灭，而是会慢慢泄气。之前，我以为政府可能会在四季度放松宏观调控，导致房价再次疯涨，泡沫会在2011年下半年或2012年突然破灭。

　　“脱衣秀”
　　政府目前仍然没有放宽二三套房的贷款限制。那些最有潜力的买房者受到了管制，这些买房者其实并没有足够的现金，主要依靠贷款买房，因此，房价不能更上一层楼了。

　　除了信贷政策，流动性也在收紧。人民币的汇率仿佛是一场“脱衣秀”。经过多年等待，都没有看到“真材实料”，对冲基金终于受够了，再也不想等下去了。尽管美国财长盖特纳又一次大声疾呼人民币被低估了，但市场对此已经麻木了。人民币NDF市场并不指望人民币在明年会大幅升值。

　　这对流入中国的热钱影响极大。存款业的竞争日趋激烈。银行提供的理财产品极像存款，但提供的利息却比央行规定的利息高得多。

　　经济衰退？
　　现在中国房地产价格正在慢慢下跌，并将于2012年加快步伐，届时，中国经济也将会受挫。未来十年内，出口、消费和基础设施将会以7%-8%的速度增长。与近年来相比，这个增速相对较慢，但它更有利于提升工资、家庭生活水平和企业利润。

　　中国人不能用房屋净值贷款来消费。2000多万套空置房的户主们将会越来越穷或是破产。豪车的销售量可能也会减少。但是中产阶级将更具有购买力，因为他们从投机者那里买房的成本会降低。

　　为了防止房地产泡沫泄气而影响到其他投资领域，政府必须迅速向银行注资。政府有足够的财力和智力这么做。在过去十年，中国拥有强大的楼市和疲软的消费。而未来十年，情况可能刚好相反。

　　楼市的投机者们就像冷水锅中的大闸蟹，正在挨煮。但是，趁着现在火小、水温低，聪明人还有时间逃出生天。■

　　（作者为玫瑰石顾问公司董事，经济学家；本文英文版首先发于彭博，财新记者陈璐译）

[Stradlinz]

Hi Dennis, what's ur personal view on this article? Remembered some time ago that u mentioned if property market in China crash, it will definitely affect HKG property market which in turn will affect SG properties as well.

This situation is quite different, while China properties has been shooting thru the roof.. the stock market has been very sluggish. While we can usually correlate property with stock markets.. it is not the case now in which property market typically lag by 1-2 quarter compared with stock market.. So what other signals should we take note of in this case? What will be the major catalyst which has the potential to bring down the China ppt market?

1 major factor is interest rate. But with Fed not expected to increase rate anytime soon.. Why is Andy Xie so confident in his predictions?

[Stradlinz]

In the article Andy Xie argued that the catalyst will be capital flight. However it's quite difficult to predict what Chinese govt might do with its currency, will it appeciate it or not. So is this a strong enough reason to support his argument?

[Dennis Ng]

Hi Dennis, what's ur personal view on this article? Remembered some time ago that u mentioned if property market in China crash, it will definitely affect HKG property market which in turn will affect SG properties as well.

This situation is quite different, while China properties has been shooting thru the roof.. the stock market has been very sluggish. While we can usually correlate property with stock markets.. it is not the case now in which property market typically lag by 1-2 quarter compared with stock market.. So what other signals should we take note of in this case? What will be the major catalyst which has the potential to bring down the China ppt market?

1 major factor is interest rate. But with Fed not expected to increase rate anytime soon.. Why is Andy Xie so confident in his predictions?

Actually if China property prices fall by 50%, it is NOT too much. Why? Becos on average China property prices have gone up like over 300% in the last few years. Just crunch the numbers eg. $1 million property went up to $4 million, then drop 50% to $2 million, actually prices still 100% higher than before...

I can only agree with Andy Xie that a few cities, eg. Shanghai, Beijing, property prices might be bubblish, but I do NOT agree with him that property prices in 2nd and 3rd tier cities would fall, in fact, the likelihood is that for such cities, property prices likely to continue to rise.

Thus, it is important to be mindful that China property market is NOT a homogenous market, and most of the cities are 2nd and 3rd Tier, not 1st Tier Cities.

From technical analysis, it appears that China stock market has BOTTOMED after 12 months of falling, and China and other Global Stock Markets are poised for another Round of Rally in the near future.

Frankly, compared to Shanghai and Beijing, High End property prices in Singapore are "cheap", so I'm not too concerned at this juncture.

I do have fears that there might be a 2nd Global Financial Crisis probably as early as sometime in year 2011 or year 2012 though.

Maybe Andy Xie is over-confident. Over the years, I've learned to always be prepared for the possibility of being wrong in my views, so the No. 1 question I always hold in my mind is this:"What if I'm wrong, will I be financially ok?"

If Andy Xie is so confident about his views, he should be putting his MONEY where his mouth is. The problem is he has never shared how and where he puts his money.

[Stradlinz]

Hi Dennis, what's ur personal view on this article? Remembered some time ago that u mentioned if property market in China crash, it will definitely affect HKG property market which in turn will affect SG properties as well.

This situation is quite different, while China properties has been shooting thru the roof.. the stock market has been very sluggish. While we can usually correlate property with stock markets.. it is not the case now in which property market typically lag by 1-2 quarter compared with stock market.. So what other signals should we take note of in this case? What will be the major catalyst which has the potential to bring down the China ppt market?

1 major factor is interest rate. But with Fed not expected to increase rate anytime soon.. Why is Andy Xie so confident in his predictions?

Actually if China property prices fall by 50%, it is NOT too much. Why? Becos on average China property prices have gone up like over 300% in the last few years. Just crunch the numbers eg. $1 million property went up to $4 million, then drop 50% to $2 million, actually prices still 100% higher than before...

I can only agree with Andy Xie that a few cities, eg. Shanghai, Beijing, property prices might be bubblish, but I do NOT agree with him that property prices in 2nd and 3rd tier cities would fall, in fact, the likelihood is that for such cities, property prices likely to continue to rise.

Thus, it is important to be mindful that China property market is NOT a homogenous market, and most of the cities are 2nd and 3rd Tier, not 1st Tier Cities.

From technical analysis, it appears that China stock market has BOTTOMED after 12 months of falling, and China and other Global Stock Markets are poised for another Round of Rally in the near future.

Frankly, compared to Shanghai and Beijing, High End property prices in Singapore are "cheap", so I'm not too concerned at this juncture.

I do have fears that there might be a 2nd Global Financial Crisis probably as early as sometime in year 2011 or year 2012 though.

Maybe Andy Xie is over-confident. Over the years, I've learned to always be prepared for the possibility of being wrong in my views, so the No. 1 question I always hold in my mind is this:"What if I'm wrong, will I be financially ok?"

If Andy Xie is so confident about his views, he should be putting his MONEY where his mouth is. The problem is he has never shared how and where he puts his money.

Points noted. Have a nice sunday

[jeffreychua]

I saw the below.

谢国忠：买房抗通胀是胡扯 房价跌助力股市上涨

2011年02月21日 金羊网－新快报

新快报讯 记者强燕报道 在上周六于广州举行的“2011货币政策与经济趋势高峰论坛”上，独立经济学家谢国忠 发表主题演讲时指出，现在全球经济陷入滞胀，由于结构性问题没解决，短期内很难有真正复苏；而就中国而言，会继续收货币，房地产业到了拐点，如果房价下跌，则释放出来的流动性 将会推动股市上涨。

谢国忠指出，成熟市场 现在面临较大财政难题，一方面债务过高，另一方面就业不足，所以利率会维持较低水平。现在欧洲的财政赤字已经引起大众的不安，美国也必须控制财政赤字。但降低财政赤字的后果就是经济不会太好，另一个是不能加息。

尽管通胀现在由发展中国家向发达国家传递，发达国家也不太敢加息，即使加息，也只是应付式的，最终西方会接受通胀高企的局面。谢国忠认为，在这样的大背景下，能源、贵金属、大宗商品都会有机会，特别是农产品(17.35,0.17,0.99%)，“每次调整都是介入机会”，“除非美国炒掉伯南克 开始大举加息，那时就要把所有资产都卖掉”。

至于发展中国家，谢国忠认为都面临较大的通胀压力，而高通胀又引发了社会动荡，像埃及就是矛盾激化的一个例子。中国2007年经济就存在过热的情况，本来2008年是最好的调控时期，现在调痛苦多了，但也必须要调整，收回超发的货币，回归正常化。

谢国忠分析指出，“今年的钱与去年相比非常紧张”，房地产的拐点到了，“因为现在想放钱也不能放了”，再加上未来有大量廉租房上市，所以房地产的价格一定会掉，“买房抗通胀是胡扯”。

他认为，房地产下调的时间会较长，估计有三年左右，“会一波一波地下跌，估计跌个15%左右，一些想买房的会冲进来，成交放大，然后再继续跌。”

谢国忠认为，在楼市有大调整之前，股市要改变现在窄幅波动的局面比较难，因为从熊转牛要解决流动性问题。而如果房价下调15%，房市成交会活跃，资金就会流转起来，股市就会有机会。从基本面看，在房地产周期过去之后，由消费引发的周期会有一波赚大钱的机会。

[Dennis Ng]

Hi Jeffreychua,

thanks for sharing.

I highlighted in Blue what I think are crucial points Andy Xie raised.

Cheers!

Dennis Ng

I saw the below.

谢国忠：买房抗通胀是胡扯 房价跌助力股市上涨

2011年02月21日 金羊网－新快报

新快报讯 记者强燕报道 在上周六于广州举行的“2011货币政策与经济趋势高峰论坛”上，独立经济学家谢国忠 发表主题演讲时指出，现在全球经济陷入滞胀，由于结构性问题没解决，短期内很难有真正复苏；而就中国而言，会继续收货币，房地产业到了拐点，如果房价下跌，则释放出来的流动性 将会推动股市上涨。

谢国忠指出，成熟市场 现在面临较大财政难题，一方面债务过高，另一方面就业不足，所以利率会维持较低水平。现在欧洲的财政赤字已经引起大众的不安，美国也必须控制财政赤字。但降低财政赤字的后果就是经济不会太好，另一个是不能加息。

尽管通胀现在由发展中国家向发达国家传递，发达国家也不太敢加息，即使加息，也只是应付式的，最终西方会接受通胀高企的局面。谢国忠认为，在这样的大背景下，能源、贵金属、大宗商品都会有机会，特别是农产品(17.35,0.17,0.99%)，“每次调整都是介入机会”，“除非美国炒掉伯南克 开始大举加息，那时就要把所有资产都卖掉”。

至于发展中国家，谢国忠认为都面临较大的通胀压力，而高通胀又引发了社会动荡，像埃及就是矛盾激化的一个例子。中国2007年经济就存在过热的情况，本来2008年是最好的调控时期，现在调痛苦多了，但也必须要调整，收回超发的货币，回归正常化。

谢国忠分析指出，“今年的钱与去年相比非常紧张”，房地产的拐点到了，“因为现在想放钱也不能放了”，再加上未来有大量廉租房上市，所以房地产的价格一定会掉，“买房抗通胀是胡扯”。

他认为，房地产下调的时间会较长，估计有三年左右，“会一波一波地下跌，估计跌个15%左右，一些想买房的会冲进来，成交放大，然后再继续跌。”

谢国忠认为，在楼市有大调整之前，股市要改变现在窄幅波动的局面比较难，因为从熊转牛要解决流动性问题。而如果房价下调15%，房市成交会活跃，资金就会流转起来，股市就会有机会。从基本面看，在房地产周期过去之后，由消费引发的周期会有一波赚大钱的机会。

[sereneloong]

Can anyone kindly translate for those who don't read Mandarin or are just poor in it? Thanks!

[JIMMYKKL]

the highlight by Dennis

谢国忠分析指出，“今年的钱与去年相比非常紧张”，房地产的拐点到了，“因为现在想放钱也不能放了”，再加上未来有大量廉租房上市，所以房地产的价格一定会掉，“买房抗通胀是胡扯”。

他认为，房地产下调的时间会较长，估计有三年左右，“会一波一波地下跌，估计跌个15%左右，一些想买房的会冲进来，成交放大，然后再继续跌。”

谢国忠认为，在楼市有大调整之前，股市要改变现在窄幅波动的局面比较难，因为从熊转牛要解决流动性问题。而如果房价下调15%，房市成交会活跃，资金就会流转起来，股市就会有机会。从基本面看，在房地产周期过去之后，由消费引发的周期会有一波赚大钱的机会。

a direct translate in brief, it mean:
andy xie analysis says, "money release this year compared last year is more tense", real estate has reach a turning point, "cos now want to pump money into market also cannot liao", plus there is huge low cost housing coming onstream in future, therefore housing price must fall, "buy house to hedge inflation is rubbish".

he thinks, housinf price correction time will take longer, estimate to be around 3 years, "will fall in wave by wave, estimate to fall about 15%, some who wish to buy will rush in, transaction will increase, follow by continuing price drop." (melting, in other word)

andy xie believes, before a big correction in housing, a change to current stock market narrow fluctuation is difficult, because from bear to bull must first solve fund movement problem. and if housing price correct down 15%, housing transactions will become active, funds will flow, stock market may have a chance. from this basic point view, after this property cycle over, another cycle inflict by consumption will have a wave of earn big money chance.

ah peh sweat a lot to try this, hope it help little bit. all others are welcome to put in your effort. phew....

http://blog.english.caing.com/andyxie

[Mps112]

Jimmy

thank you for your effort. Much appreciated.

the highlight by Dennis

谢国忠分析指出，“今年的钱与去年相比非常紧张”，房地产的拐点到了，“因为现在想放钱也不能放了”，再加上未来有大量廉租房上市，所以房地产的价格一定会掉，“买房抗通胀是胡扯”。

他认为，房地产下调的时间会较长，估计有三年左右，“会一波一波地下跌，估计跌个15%左右，一些想买房的会冲进来，成交放大，然后再继续跌。”

谢国忠认为，在楼市有大调整之前，股市要改变现在窄幅波动的局面比较难，因为从熊转牛要解决流动性问题。而如果房价下调15%，房市成交会活跃，资金就会流转起来，股市就会有机会。从基本面看，在房地产周期过去之后，由消费引发的周期会有一波赚大钱的机会。

a direct translate in brief, it mean:
andy xie analysis says, "money release this year compared last year is more tense", real estate has reach a turning point, "cos now want to pump money into market also cannot liao", plus there is huge low cost housing coming onstream in future, therefore housing price must fall, "buy house to hedge inflation is rubbish".

he thinks, housinf price correction time will take longer, estimate to be around 3 years, "will fall in wave by wave, estimate to fall about 15%, some who wish to buy will rush in, transaction will increase, follow by continuing price drop." (melting, in other word)

andy xie believes, before a big correction in housing, a change to current stock market narrow fluctuation is difficult, because from bear to bull must first solve fund movement problem. and if housing price correct down 15%, housing transactions will become active, funds will flow, stock market may have a chance. from this basic point view, after this property cycle over, another cycle inflict by consumption will have a wave of earn big money chance.

ah peh sweat a lot to try this, hope it help little bit. all others are welcome to put in your effort. phew....

http://blog.english.caing.com/andyxie

[Dennis Ng]

I personally think Andy Xie is too "conservative", when Property Prices fall in China, it can easily drop 30% to 50%, this had happened before in the 90s when Shanghai property prices fell as much as 50%.

In the last few years, property prices in major cities in China have gone up by 300% to 500%, so prices falling by 50% is NOT unimaginable.

I share Andy Xie's views that it is JUST A MATTER OF TIME that China 1st Tier Cities, especially Shanghai and Beijing property prices would fall, it might NOT be this year, as markets when go crazy always go to Extreme.

The market will Crash when almost everyone in China think that China Property Prices can only go up, that is the TIPPING point, in my personal opinion, I think we are quite close to this point, but not yet.

China has many, many properties (condos) completed but Vacant. Anyone who think that this is NORMAL obviously is NOT normal and is "crazy" without realising it, yet many people think Shanghai and Beijing Property Market are NOT crazy when such abnormal things is a NORMAL sight in China.

In 1999, most people also think that Tech companies not making money but have ZERO revenue and zero Profits is NORMAL, and that resulted in Nasdaq doubling (going up by 100%) in 7 short months, from 2,500 level in May 2009 to above 5,000 points by Jan 2000..... the market turned and crashed in Mar 2009.

Market Cycles repeat themselves, however most people do NOT learn from Mistakes. As I said in seminar:"to make a mistake once is Human, to repeat the same mistake twice is inhuman."