Chapter 37 China's property bubble won't survive 2014

Reading reminder: Chen Zhiwu, Xie Guozhong, Cao Jianhai and other far-sighted economists, without exception, expressed similar predictions in 2009. Within five years, China's high housing prices will inevitably burst, not to the top, but to burst!And Xie Guozhong even announced in October 2010 that China's real estate prices had peaked and would usher in a five-year recession.I conclude that China's property market bubble will not survive 2014. You may have seen the "Timetable of China's Real Estate Collapse" that has been widely circulated on the Internet.Is there a timetable for China's real estate collapse?The answer is yes, but to accurately predict this timetable, I am afraid that only God can do it.

This "real estate collapse timetable" compares Japan's 1985-1991 and China's 2005-2008 real estate market trends. The two are surprisingly similar. In terms of currency appreciation pressure, low consumption rate, high savings rate, loose monetary policy, etc., Also quite similar.It finally predicted that Chinese real estate would collapse in 2011. It is of course possible that the property market will collapse next year. My judgment is that starting from 2011, it may collapse at any time.If you want to add a final number of years, China's high housing prices will not last for 4 years at most.

Don't use urbanization to fool people. This is changing the concept secretly. Urbanization has little to do with real estate and property market prices.Because when we discuss the real estate market, we don’t include counties at all. The urbanization of the vast majority of farmers in China is realized through counties.When we discuss housing prices, we refer to the housing prices of large and medium-sized cities, especially the housing prices of large cities such as Beijing, Shanghai and Guangzhou.The housing prices of thousands of counties in China are not within the scope of discussion at all.What is the relationship between farmers moving to county towns and housing prices in Beijing, Shanghai, and Guangzhou?It doesn't matter.

Have any farmers moved to big cities?Yes, a very small part, mainly college students from rural areas, and a very small number of nouveau riche.This does not constitute a reason to support long-term high housing prices. Don't take the limited supply of land as an example. China has a lot of land, and high housing prices have nothing to do with land at all.Just look at Hainan. There are only a few million people in Hainan province, and the land is vast and sparsely populated. Isn’t the housing price still being fired up?I still have to go back to my previous judgment that China's abnormally high housing prices are a Ponzi scheme with funds piled up.

Just because people from all over the north go to Beijing to buy houses, and hot money from all over China and the world come to Beijing to speculate in real estate, don’t insist that Beijing’s housing prices will never drop sharply, let alone collapse.It is true that Beijing will not be the first to collapse, but if you want to say that it is completely impossible to collapse, it is only talking about the economy from the economy. You have forgotten that once a national panic is formed, the collapse of other cities will definitely drive Beijing. crash.Beijing is the strongest bastion of high housing prices, but this bastion will definitely be blown up by Dong Cunrui in the end.

Let me also list a timetable for the collapse of China's property market.Refer to the history of Japan and the United States: the Japanese stock market crashed in 1990, and the housing market crashed two years later; the US stock market crashed in 1929, and the housing market crashed three years later. That said, their housing market crashed two or three years after the stock market crashed.Is there a causal relationship between this?It can be explained in this way that the collapse of stocks led to the annihilation of residents' wealth, and the tight living of everyone led to a serious shortage of effective demand, and the crisis of the real economy occurred.At the beginning of the crisis, factory owners who were unprofitable in the real economy poured their funds into real estate for profit.The injection of these funds led to a real estate boom, and residents with savings also followed suit.One or two years later, because the economy has been in depression, factory owners still cannot make money in the real economy, and the wage earners are unemployed or receive low wages. At this time, in order to maintain their lives, they have to start liquidating their properties. More and more, until the surge came, but there were very few takers, and the property market collapsed.

From 2007 to 2008, the Shanghai Composite Index fell from more than 6,000 points to more than 1,000 points, which can be regarded as a collapse; at the same time, the international financial crisis led to a sharp drop in exports, and the real economic crisis of internal and external difficulties began.A large amount of real economy funds began to intervene in real estate on a large scale. In 2009, although the figures showed that the GDP growth rate was "guaranteed at 8" (a large part of which was generated by real estate), the real economic crisis continued, and a large number of enterprises closed down. In 2010, the crisis of the real economy continued, and the owners of closed businesses and unemployed house slaves had to sell their houses due to lack of cash to support their lives.

From 2011 to 2014, the sell-offs in the property market will gradually surge until there is no one to take over and the property market will collapse. 2014 is an optimistic estimate. If we compare the examples of Japan and the United States above, it is likely that the bubble in China’s property market will burst by the end of 2011. Considering the reality in China, perhaps the property market can last for another 3 years.