Home > March 2017 > March 20, 2017 So Far in March, 18 Major Cities in China have added controls in home buying

March 20, 2017 So Far in March, 18 Major Cities in China have added controls in home buying

March 20th, 2017

Futures have been on the flat side for most of the night. Fourth Hour of the europe session and they are still flat. Oil is having a rough night with it dropping over 1.30% . There are rumors that the BHP Copper strike workers might be talking, copper is tad weaker even with a confirmation that China House Sales in Feb were higher. So far for March, Shanghai had a bit of a move up last week. That Move was without much commitment. Shanghai Copper futures flat. The G20 drops the anti protectionist pledge (which some say is causing the sell off in oil, fwiw). Gossip was the USA vs everybody else there. Europe Markets are down .20%. Reuters is reporting that China Govt will be trying to  introduced new restrictions for financial institutions seeking to outsource fund management to external fund managers..this in a way to slow down funds going into shadow banking. Trivia, on March 24 Russia’s Central Bank Meets and should cut rates .25%

March 2017

  • Trading_Nymph

    Per Reuters..Financial institutions such as banks and insurers have been giving fund management mandates for funds exceeding 1 trillion yuan ($144.90 billion) to mutual fund houses as they outsource their wealth management operations, the newspaper said.

    Regulators are worried that such funds are used as a shadow banking channel by lenders to make risky bets in corporate bonds or equities, without effective management by the external fund house.


    To prevent this, the China Securities Regulatory Commission (CSRC) issued rules on Friday requiring funds where single institutions control 50 percent or more to operate as closed-end funds, and barring them from receiving subscriptions from individual investors, according to the report.

    Additionally, mutual fund houses, their senior executives or fund managers must invest a minimum 10 million yuan into such funds, hold the stake for at least three years, and operate independently, the Securities Times reported, citing the new rules.

  • Trading_Nymph

    From China South Morning Post…Guangzhou, four cities follow Beijing’s lead to curb home purchases
    A total of 18 municipal governments have rolled out cooling measures in March, including all major mainland China cities.
    PUBLISHED : Monday, 20 March, 2017, 3:33pm
    UPDATED : Monday, 20 March, 2017, 4:04pm

    Zheng Yangpeng
    Zheng Yangpeng

    China Property
    China Home Price
    More on this story
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    Five mainland Chinese cities have followed Beijing’s lead in tightening home purchase restrictions, rolling out extensive new measures over the past three days to curb speculative buying.
    Within a few hours of Beijing introducing the nation’s harshest curbs on Friday afternoon to dampen surging home prices, Shijiazhuang, the capital of neighbouring Hebei province, the city of Guangzhou in southern China, and Zhengzhou, the capital of central Henan province, rolled out tighter buying curbs.
    Over the weekend, Hunan’s capital of Changsha and Baoding, a city 150 kilometres southwest of Beijing, both imposed stricter cooling measures, bringing the total number of mainland cities that have introduced such measures in March to 18. These include all the major cities in China and smaller cities surrounding Beijing and Shanghai.
    An analysis of the policy details put forward by each city indicates that they aim to stamp out speculative demand that was blamed for the latest surge in home prices, with speculators taking advantage of loopholes in property curbs that have been put in place since October.
    For example, many cities limited local residents to owning two or three homes while non locals could only buy one. The number of years non local residents had to pay into the social security fund to gain purchase eligibility was also raised, while the urban areas subject to purchase restrictions were expanded. In addition, local governments increased the down payment ratio requirement.
    However, these policies seem mild compared with those imposed in Beijing on Friday. Down payments for second-time buyers of private sector-developed homes were raised to at least 80 per cent of the purchase price, up from 70 per cent, and the definition of “second-time buyer” was broadened to include those who have any mortgage history, regardless of where or whether they currently own a flat.
    Beijing rolls out harshest ever home buyer down payment levels

    Analysts said the stricter definition of “first-time buyers” implemented by some cities was targeted at those who sold their existing home and couples who divorced in order to acquire “first-time” status. So far only Beijing, Shanghai, Shenzhen and Nanjing have imposed such draconian rules.
    “The tougher definition of ‘first-time buyers’ will significantly raise the home purchase threshold and tame speculative demand for the moment but it also hurts the non-speculative trade-up demand – people who are just seeking a larger home for their kids,” said Zhang Hongwei, a research director at Tospur Real Estate Consulting Co.
    Hu Jinghui, vice president of consultancy Bacic & 5i5j, said the further tightening would see buyers with less urgency or those in a weaker financial situation delay their purchases, driving down transaction volumes. Hu added that the new policies were necessary to calm the jittery mood in the market and slow the price upsurge.
    The tougher definition of ‘first-time buyers’… also hurts the non-speculative trade-up demand – people who are just seeking a larger home for their kidsZHANG HONGWEI, TOSPUR REAL ESTATE CONSULTING
    The urgent need for greater home market control was evident in the February price data released by the National Bureau of Statistics. Despite a 0.1 per cent month-on-month decline in Beijing’s new home prices, price growth for pre-owned homes, which make up over 80 per cent of the capital city’s transactions, accelerated to 1.3 per cent in February from 0.8 per cent in January, following a 0.2 per cent gain in December. Pre-owned home prices in Guangzhou leapt 2.7 per cent month on month in February.
    He Lifeng, the newly appointed head of the National Development and Reform Commission – mainland China’s top economic planner – lashed out at the “large capital influx into the property sector” at a weekend conference, saying it was at the expense of the real economy. He vowed to control the excessive credit flow into the property industry.
    Still, there are critics of the latest round of cooling measures. Yi Xianrong, a finance professor with Qingdao University, said most second-tier cities still allow non local residents to buy one home, which in effect encourages them to do so. The eligibility restriction also prompts locals, who otherwise may not have purchasing intent, to buy more than one home.
    He said the most powerful tool to deter speculative buying – property taxes – remains elusive despite years of debate due to powerful vested interests. A spokeswoman for the National People’s Congress said earlier this month that a proposed property tax law would not be on the agenda for this year’s legislature.

  • Trading_Nymph

    From Shanghai Daily on last week home sales…SEVEN-DAY sales of new homes rose to this year’s highest in Shanghai with average price remaining little changed due to insignificant structural shift, latest market data suggest.

    The area of new residential properties sold, excluding government-subsidized affordable housing, jumped 34.5 percent to 163,000 square meters last week, Shanghai Centaline Property Consultants Co said in a report released today.

    The outlying district of Jiading, which has seen rather abundant supply recently, recorded weekly sales of 39,000 square meters, the most among its counterparts around the city. It was immediately followed by Qingpu and Songjiang, where about 20,000 square meters of new houses were sold in both districts during the seven-day period, Centaline data showed.

    “It was actually the first major rebound we saw this year but it still seemed a bit far from the 200,000-square-meter weekly threshold which is usually considered an average level,” said Lu Wenxi, senior manager of research at Centaline. “It is hard to say whether such strength could be maintained for another week.”

    The average price of new homes sold last week edged up 1.1 percent to 45,881 yuan (US$6,628) per square meter, with medium to low-end properties continually playing a dominant role.

    Citywide, a residential project in Jiading sold 320 apartments last week at an average cost of 31,219 yuan per square meter, comfortably outperforming all other counterparts around the city. Among the 10 most popular projects, two asked for more than 50,000 yuan per square meter on average while the rest eight cost between 31,000 yuan per square meter and 46,000 yuan per square meter, according to Centaline data.

    Supply of new houses also rose notably amid improved sentiment among real estate developers.

    About 100,000 square meters of new residential properties were released to the local market last week, a surge of 48.5 percent from the previous period.

    Notably, a CITIC development in remote Zhujiajiao of Qingpu launched 39,000 square meters of new houses alone last week and these townhouses sold for 33,000 yuan per square meter on average.

    Real Estate

  • Trading_Nymph

    Panther, I was going to title the post last night Flat, No Comment lol. Based on the testimony that FBI was going to give today. I should have gone with that

  • Trading_Nymph

    Oil is down 10% this year…10% more and we get a bear. FWIW, with HUGE inventories and a super need for India and China to buy…that Bear is looking darn good.

  • Trading_Nymph

    WSJ piece today on Central Banks…They forgot Swiss and Australia..lol https://www.wsj.com/articles/as-easy-money-era-winds-down-investors-bet-on-growth-1489707576?mod=e2twcb

  • Trading_Nymph

    can’t find any new gossip on Genscape Oil Data today.

  • Trading_Nymph

    I don’t even follow this one, I am such a rookie. From Bloomberg..While the CBOE Volatility Index declined last week, the cost of protecting against large market swings has surpassed a peak hit following the Brexit vote, reaching a fresh all-time high. With the Federal Reserve raising borrowing costs and the political environment remaining uncertain, the CBOE SKEW Index climbed for five straight days, its longest streak since June 2016. The last time the gauge of out-of-the money S&P 500 Index options prices was as high relative to the volatility gauge, the VIX surged 65 percent in the next month

  • Trading_Nymph

    Today, Friday, March 17 2017, the Baltic Dry Index climbed by 9 points, reaching 1205 points.
    Baltic Dry Index is compiled by the London-based Baltic Exchange and covers prices for transported cargo such as coal, grain and iron ore. The index is based on a daily survey of agents all over the world. Baltic Dry hit a temporary peak on May 20, 2008, when the index hit 11,793. The lowest level ever reached was on Wednesday the 10th of February 2016, when the index dropped to 290 points.
    Source: Hellenic Shipping News Worldwide

  • Trading_Nymph

    Panther are you ok?

  • panther341

    yeah. Just snoozing. I did alot of yard work over the last week and I was tired yesterday. Went to bed Mon night at like 8:30. Woke up at 3 AM hungry. Ate oatmeal at 3 AM and now I am hungry again.

    Markets been mostly a snoozer since the FOMC last week. Yelln speech this Thursday. probly more snooze.