Mike Hoffa says “Boxing Day comes early for China”
Boxing Day comes early for China
That was the week in property, by Mike Hoffa
I’m a big fan of Christmas, always have been.
Even when the magic of getting new toys and believing in Santa Claus wears off it’s a great chance to catch up with family and friends, take a bit of time out and generally enjoy yourself for a few weeks. And despite the harsh economic times we’re currently in, everyone seems to be getting into the Christmas spirit and remembering that it’s not about spending loads of dosh on presents, but taking a bit of time to have fun and relax.
Sadly, like most people I tend to do my fair share of overindulgence at Christmas. By this point my liver is normally beginning to feel like it needs a holiday and the old belt needs to be loosened up a notch or two. It’s like for a few weeks we just forget about the concept of eating and drinking in moderation and treat it like an all-out sprint race to consume as much as humanly possible.
“For China, it sounds a lot like Boxing day has come early this year.”
Then comes boxing day, always a slight anti-climax as we realise that some calorie controlling might be in order. Like everyone else I keep the party rolling until New Year, but somewhere in the back of your mind you know that hangover is just round the corner and it’s going to be a miserable January of cutting back.
For China, it sounds a lot like Boxing day has come early this year. As if the news wasn’t bleak enough for the Western economies, with a double-dip recession all but a foregone conclusion now, it looks like China’s bubble might have finally popped. The Telegraph picks up on the festive theme, reporting on the news with a piece entitled ‘China’s epic hangover begins’ and it doesn’t make good reading.
According to Homelink, a property website reporting on China, new house prices in Beijing fell 35% in November from the previous month. Yes – you did read that correctly, thirty-five percent. That’s not good, in fact it’s Bad with a capital B. Bluntly, it makes the turbulence we’ve seen in the UK property market seem like a storm in a teacup. If the figures are to be believed, China’s property market has lost as much in one month as we’ve lost in three years. Ouch.
“…the scale of lending in China (in GDP terms) is approximately double that of Japan prior to the Nikkei bubble bursting over 20 years ago…”
It’s not just China either, all of the high growth emerging markets are starting to feel the strain. Or, as the Telegraph reports from Societe Generale’s Albert Edwards, “The BRICs are falling like bricks.” The pace of the unravelling is a worry and it doesn’t bode well for the future. To put this in perspective, the scale of lending in China (in GDP terms) is approximately double that of Japan prior to the Nikkei bubble bursting over 20 years ago – and Japan is still recovering.
It looks like the global recession might finally be coming to China (and other emerging markets). Don’t underestimate the impact this might have on the UK property market, would be my advice, and keep a close eye on where you park your money.
So drink and be merry, enjoy the festive season and overindulge while you can, because a global hangover is on its way and it’s going to take more than Alka Seltzer to sort this one out.
About the author:
Mike Hoffa has been working in the property sector for more years than he cares to remember, as a tenant, first time buyer, second time buyer, landlord, adviser and general trouble maker. He keeps his real identity fiercely secret, but some say he can often be found at the back of property auctions howling, but only when a full moon is out. He’s also rumoured to be of average height, weight, ethnicity and class, which he claims accounts for his inability to be politically correct or wear pastel coloured cardigans.
Mike’s question of the week: Has recession just found the emerging markets?
This entry was posted
on Tuesday, December 20th, 2011 at 2:10 pm and is filed under Mike Hoffa.
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You can leave a response, or trackback from your own site.
Mike Hoffa says “Boxing Day comes early for China”
Boxing Day comes early for China
That was the week in property, by Mike Hoffa
I’m a big fan of Christmas, always have been.
Even when the magic of getting new toys and believing in Santa Claus wears off it’s a great chance to catch up with family and friends, take a bit of time out and generally enjoy yourself for a few weeks. And despite the harsh economic times we’re currently in, everyone seems to be getting into the Christmas spirit and remembering that it’s not about spending loads of dosh on presents, but taking a bit of time to have fun and relax.
Sadly, like most people I tend to do my fair share of overindulgence at Christmas. By this point my liver is normally beginning to feel like it needs a holiday and the old belt needs to be loosened up a notch or two. It’s like for a few weeks we just forget about the concept of eating and drinking in moderation and treat it like an all-out sprint race to consume as much as humanly possible.
“For China, it sounds a lot like Boxing day has come early this year.”
Then comes boxing day, always a slight anti-climax as we realise that some calorie controlling might be in order. Like everyone else I keep the party rolling until New Year, but somewhere in the back of your mind you know that hangover is just round the corner and it’s going to be a miserable January of cutting back.
For China, it sounds a lot like Boxing day has come early this year. As if the news wasn’t bleak enough for the Western economies, with a double-dip recession all but a foregone conclusion now, it looks like China’s bubble might have finally popped. The Telegraph picks up on the festive theme, reporting on the news with a piece entitled ‘China’s epic hangover begins’ and it doesn’t make good reading.
According to Homelink, a property website reporting on China, new house prices in Beijing fell 35% in November from the previous month. Yes – you did read that correctly, thirty-five percent. That’s not good, in fact it’s Bad with a capital B. Bluntly, it makes the turbulence we’ve seen in the UK property market seem like a storm in a teacup. If the figures are to be believed, China’s property market has lost as much in one month as we’ve lost in three years. Ouch.
“…the scale of lending in China (in GDP terms) is approximately double that of Japan prior to the Nikkei bubble bursting over 20 years ago…”
It’s not just China either, all of the high growth emerging markets are starting to feel the strain. Or, as the Telegraph reports from Societe Generale’s Albert Edwards, “The BRICs are falling like bricks.” The pace of the unravelling is a worry and it doesn’t bode well for the future. To put this in perspective, the scale of lending in China (in GDP terms) is approximately double that of Japan prior to the Nikkei bubble bursting over 20 years ago – and Japan is still recovering.
It looks like the global recession might finally be coming to China (and other emerging markets). Don’t underestimate the impact this might have on the UK property market, would be my advice, and keep a close eye on where you park your money.
So drink and be merry, enjoy the festive season and overindulge while you can, because a global hangover is on its way and it’s going to take more than Alka Seltzer to sort this one out.
About the author:
Mike Hoffa has been working in the property sector for more years than he cares to remember, as a tenant, first time buyer, second time buyer, landlord, adviser and general trouble maker. He keeps his real identity fiercely secret, but some say he can often be found at the back of property auctions howling, but only when a full moon is out. He’s also rumoured to be of average height, weight, ethnicity and class, which he claims accounts for his inability to be politically correct or wear pastel coloured cardigans.
Mike’s question of the week: Has recession just found the emerging markets?
Tags: Housing Market, makeoffer.co.uk, Property, Property Auctions, Property Market Comment, UK Property Market
This entry was posted on Tuesday, December 20th, 2011 at 2:10 pm and is filed under Mike Hoffa. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.