Friday, May 9, 2014

Chinese property spree

Over the last 24 hours, there were 2 articles or news that possibly points to where the property direction is heading.

The first: Tropicana sold a piece of very prime land in Bukit Bintang to Agile Property (Chinese owned and Hong Kong listed) for RM3280 sq ft - much higher than previous book valuation in 2012. This pretty much value that area very highly, although I do not know what was valuation in an adjacent area in previous transactions. The interesting thing is that it is a Chinese company which has footprint in 40 cities in China and Agile does have property launches in Iskandar as well. This shows that there are demand coming from China nationals into buying overseas property. That was what I read happened to Australia as well - especially Perth and Melbourne.

Then another story: in US. Apparently, the last quarter, there was a huge jump in cash transactions for properties in US. This story says that interest are shown in nice holiday areas in US and much more transactions were in the form of cash (compared to before), partly to do with interest rates charged by banks have increased and many banks are quite stringent in terms of lending. The story did not mention who were the foreign buyers but I would guess that many could be Chinese (non Malaysian) and Russian.

At the same time, there is this jittery feeling among stocks investors especially on China's properties. Some of these developers - Agile Property inclusive whose bond ratings are being monitored. Their bonds issuance are no longer hot properties.

We know that there many rich ones which have cash to buy, but yet property prices are probably not holding well, and the feeling is that it can be very soft moving forward.

I am just not able to piece things together in this. Is China facing the Japan syndrome of the 1980s? When Japanese were buying properties and assets offshore while its properties at home was collapsing.

4 comments:

Fung C.F. said...

Chinamen are the largest net savers -- by far -- in the world. They just have to park their money some where, be it in equities, properties, or casinos.

felicity said...

Haha for sure

Bn911 said...
This comment has been removed by the author.
Bn911 said...

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