Mish's Global Economic Trend Analysis |
Home Prices Drop in 69 of 70 Chinese Cities; Did the Pool of Greater Fools Run Out? Posted: 25 Oct 2014 10:25 AM PDT China eased purchase restrictions last month ending its four-year campaign to contain home prices. And what a ridiculous campaign it was. Prices are down less than 1% this month and less then 1% year-over-year. Bloomberg reports China Home-Price Drop Spreads as Easing Doesn't Halt Fall. Prices dropped in 69 of the 70 cities in September from August, the National Bureau of Statistics said in a statement today, the most since January 2011 when the government changed the way it compiles the data. They fell in 68 cities in August.Did the Pool of Greater Fools Run Out? All it took for china to reverse course was a .8% year-over-year decline. Home sales are down 11% this year, but that may not last long if September is any indication. Then again, the easing of restrictions may have suckered in the last remaining greater fools. Either way, I laugh at the assessment analyst Yang Kan who says "developers will keep prices attractive as they open more projects toward the end of the year to meet sales targets". The only thing that will make prices attractive is a 50% decline in price. That's how big China's property bubble is. Even in China the pool of greater fools will eventually run out. Perhaps it already has. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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