Stealth easing in Chinese real estate, and Jim Rogers said there is no bubble25 April, 2012, 13:24. Posted by Zarathustra
Tags: Jim Rogers, Mortgages
Although most are probably still hoping for an RRR cut or something, credit easing is happening in mortgages.
This is not completely new, in fact some weeks ago we started to become aware of some banks offering mortgages with interest rates reduced by 10-15% for first-time buyers. Sina is reporting that earlier that reduction of mortgage rates in various cities, and today it is said that apparently more people are able to enjoy a 15% reduction of rates in Shanghai than it previously was. On top of reduction of interest rates, mortgages are also easier to come by. However, banks denied that they are giving out more mortgages at lower rates, even though people are finding it easier to get mortgages.
Meanwhile, there is one bloke called Jim Rogers, one of the biggest cheerleaders of the China story, said there IS no bubble in Chinese real estate:
It was a bubble in urban coastal real estate. But China, for the past three years, has been trying to pop that bubble. And the bubble has popped. You could certainly go down further, but I wouldn’t say there’s a bubble there now. Prices are coming down, transactions are coming down and people are losing money. I don’t know how long China will stay tough. I would hope they’d stay tough much longer, because they’ve got to kill inflation too.
But if anybody thinks there’s a bubble in China, they haven’t been doing their homework. The bubble popped. Prices have come down and are continuing to come down.
So there WAS bubble, and there IS no bubble?
Whatever, we think there has been, there was, and there is a bubble, which is popping, and there WILL BE NO bubble. That’s for sure, after everything comes down.