China Jan-Apr Real Estate Investment up 34%

China January-April Investment In Real Estate Development +34.3% On Year

China's statistics bureau said Wednesday investment in real-estate development totaled CNY1.334 trillion in the January-April period, up 34.3% from a year earlier.

At the same time . . .

China's commercial realty boosted by property crackdown?

There are lots of people who want to buy apartments as an investment who can`t. But they can buy commercial properties. So we are seeing a surge of money coming from what we believe is the residential investors into the commercial sector," Alastair Hughes, Asia-Pacific CEO of the firm told CNBC.

And meanwhile . . .

China's industrial output, inflation slowdown in April

Consumer inflation eased modestly to 5.3% in April from a 32-month high in March of 5.4%. The outcome topped expectations but still underlined the view that price pressures are peaking and may start to ease in the second half of 2011.

Industrial output rose 13.4% from a year earlier, but that was more than a full percentage point below both expectations and a strong pace in March. Retail sales growth eased more than expected while annual increases in money supply and outstanding yuan loans hit their lowest pace in 29 months, signs that measures to slow the economy are starting to bite.

Value of Unsold Houses in China Rose 40%

China’s real-estate developers struggle with debt

Debt carried by the nation’s developers was 1.05 trillion yuan ($162 billion), the Xinhua News Agency reported on Monday, citing figures compiled by the Shanghai-based data provider, Wind Information.

The figures were based on the 113 mainland-listed developers and their first-quarter filings.

The value of unsold houses was up 40.2% to CNY903.5 billion, the Xinhua report said.

903.5 Billion CNY == 139 Billion USD

Uninsured Mortgage Specialist Company Wary of Vancouver, Downtown Toronto

Amazing how banks adjust to risk if you remove moral hazard.

Home Capital ramps up uninsured mortgage lending

He said the company is being cautious when considering loans that will go toward properties in Vancouver or downtown Toronto, because the markets are showing signs of overheating. The company would rather lend in a stable market, than one that is posting swings in either direction.

The company reported earnings Wednesday after the markets closed, saying adjusted profit rose to $45-million in the quarter. Impaired loans represented 0.29 per cent of all loans, down from 0.47 per cent a year ago.

Chief executive officer Gerald Soloway said the lower delinquency rate is likely to due to a housing market that continues to perform well, after a period of softness through the recession. Homeowners who get into trouble are now selling on their own, instead of waiting for Home Capital to foreclose.

DING! The rising house prices are masking many many flaws in the economy and household balance sheets.

Hat tip: T.O. Bubble Boy at Greaterfool

China Foreign Direct Investment in U.S. Is Small But on the Rise

This is an analysis of Chinese Foreign Direct Investment (FDI), not so much residential real estate. But I thought the numbers illuminating.

China’s investment wave heads to U.S. shores

“China’s current outward FDI stock of $230 billion still accounts for a mere 1.2% of the global FDI stock, on a par with Denmark and only slightly above that of Taiwan,” the report said. “Japan, for instance, has a stock three times that of China, while the United States has $4 trillion, or 20 times, the OFDI assets of China.”

Included in that worldwide wave of Chinese investment was $2.3 billion worth of direct spending in the United States at the end of 2009, the report said, citing the U.S. Bureau of Economic Analysis — a minor amount compared with total FDI stock in the United States in 2009 of $2.3 trillion.

Nevertheless, the authors noted, “the average annual compound growth rate of China’s outward FDI in 2004-2008 exceeded 130%.” Why? The report cited a shifting business climate in China as one reason for the go-abroad trend.

China's Citic Bank: Severe Risk in Real Estate (update)

If someone is not seeing severe risk, what are they looking at?

China Citic Bank Sees Severe Risk in Real Estate

"We especially are paying attention to risks in the funding chain for developers. We believe as tightening continuously gets stronger, the true real estate risks will appear," Shi said.

Citic Bank aims to reduce its real-estate loans this year by a third, he said. "We are being more prudent, and the risk is controllable."

The article implies this is new lending they are cutting, not their existing loan book, but it would be nice if that were clearer.

Added: Ask and ye shall receive. WSJ added this to their article:

Citic Bank aims to reduce the amount of new real-estate loans it issues this year by a third compared to last year, he said. "We are being more prudent, and the risk is controllable."

Back to the Marketwatch article:

Separately, the CBRC said Tuesday it has no plan to issue new regulations governing property trusts in May, refuting earlier reports it may impose further tightening controls on property trusts to curb risks in the real-estate sector. The regulator said it has been consistently asking trust companies to conduct property-related business while exercising proper risk management.

Many property developers have turned to property trusts for financing in the face of lending curbs and restrictions on developers' capability of raising funds from the stock market, but there has been increased regulatory scrutiny on such activity as the authorities seek to contain credit risk.

Vancouver House Price Change Chart April 2011

Real Estate Board of Greater Vancouver Statistics Package has been released. Here is the latest house price change chart for April.

Vancouver House Price Changes, April 2011

It appears as if the previous trend line is trying to reassert itself. Last month, I suspected that it may do so now that we are fully clear of the mortgage change deadline and any late reporting from it.

The actual numbers off that projection were $620,000 for April up from $616,000 in March for all transactions and $877,000 for April up from $867,000 in March for detached transactions. That was just shy of the actual numbers of $623,000 for all and $879,000 for detached. April was always going to be higher than March because April was the highest month in 2010. Now, May, that will be a real test for the new trend line. In 2010 May was $8,000 lower than April for detached and $3000 lower for all transactions.

So, to go out on a limb, under the old trend line with April's data inserted, May would be $614,000 for all and $860,000 for detached, and continuing on that, hit zero gain year on year in August/September. Or, we could see another big discontinuity this year, like we had between May and June of last year and hit the speculative zero sum wall in two months. Such a matching drop would in fact erase the February/March surge from the chart and put us back on the earlier trend line.

China, 77 of 100 cities record price gains in April

China Housing Inflation Slows

SHANGHAI—Residential property prices in 100 major cities in China were up 0.40% in April from March,
less than March's 0.59% increase, China Real Estate Index System said Tuesday.

Not sure I'd trumpet a drop that's probably within the margin of error of the survey.

And With High Inventory, Down Go Clearance Rates

High inventory is hitting clearance rates.

Melbourne, Sydney, Brisbane Clearance Rates Charted April 2011

Melbourne, Sydney, Adelaide, Brisbane Clearance Rates Chart Smoothed April 2011

Australia House Price Change Chart March 2011

Based on the XLS file available here.

Australia House Price Change Sydney, Melbourne, Brisbane, Adelaide, Perth March 2011

Only Perth seems to be putting the brakes on the plummet in price change. Not quite ready to stick a fork in this bubble, but as of this quarter, don't expect to get more for a house than you paid for it last year, unless you upgraded it (i.e., the speculative portion of this bubble is dead).

Hobart, Canberra and Darwin would also be piled onto that pack at ~0.5% year on year if I had plotted them.

Added: Because of revisions, prices for Sydney and Melbourne are changing even more radically than my silly little prediction.

Added 2: This is a good time to recall that price change is not symmetric--a 100% increase is wiped out by a 50% drop.

Australia Capital Cities House Prices Down 1.7%

Australian Bureau of Statistics Report

	Dec Qtr 10 to Mar Qtr 11	Mar Qtr 10 to Mar Qtr 11
Established house prices	% change	% change
Weighted average of eight capital cities	-1.7	-0.2
Sydney	-1.8	0.8
Melbourne	-2.5	1.1
Brisbane	-2.5	-3.6
Adelaide	-1.0	0.9
Perth	0.5	-3.2
Hobart	0.4	0.6
Darwin	-1.0	0.5
Canberra	-0.4	1.1