here's an article, I know this is true, my wife is Chinese and
she reads the news over there all the time and tells me about
stories from her friends. It's a huge bubble waiting to
burst. I could write a book on some of the stories that she's
told me. The manipulation over there is unreal, and totally
unsustainable
It just so happens my family have investments in Beijing &
Shanghai and the returns are phenomenal - 3-7 times the return
since 2001 and we have since took profits and rebalance our
portfolio in other parts of Asia in HK and Singapore.
When you see a bubble, the first thing you do is you BUY it. (I
believe somebody already said that) The same with trading, you go
with the trend; dun fight it.
Manipulated or not, that's not really the question. (all
financial markets can be manipulated by policies; people shld
realize by now that free market is a fallacy)
The thing about bubbles is that you need to have an exit plan
and watch it closely, get out when you think it's done. Also
sometimes bubbles are like musical chairs, you better have a seat
when it pops!
now pure capital investments are easy to unload in most cases,
it's when you have hard assets where you can get stuck. For
example, take the housing bubble/bust in the US, it was far better
to have sold your houses 6 months or a year before the bubble burst
than trying to time the exact top. Because in real estate,
once you miss the top, it's hard to sell and a lot of people got
stuck, so it was better to sell early, even way early.
Yes the idea way to play a bubble is to recognize that it's a
bubble (unlike the masses who can't) ride the 80% or so of the
move, then try to exit in the late stages before it actually
ends. It's easier said than done of course.
The housing bubble is out of control in Canada, Australia and
other big countries. Of course my Canadian friends all think
"it's different this time". Speaking of "different this
time", check out HSI and where it potentially topped...
China's 9% GDP (and their insatiable demand for commodities)
is supposedly what is fuelling Australia and Canada.... I heard
that before.... in summer of '08, but it's "different this
time".... we are in "Super bull"! Rally on!!!!
I am Canadian and we are nowhere close to a bubble in real
estate..........Gimme me a break..........Prices have been
resilient but are not what they were like in 2006 in the
states..........There is actually high demand for real estate in
the larger cities exceeding supply.
Posted by sporopat on 17th of Mar 2010 at 03:51 pm
I'm just going to put my two cent in on this one. I live
in Toronto and my husband and I are looking to upgrade to a house
from our townhouse condo. We aren't in a hurry so we have
just been casually going to open houses in the neighbourhoods we
are thinking of moving to.
There are serious bidding wars going on and all the houses we
have looked at have been sold in 24 hours from when offers are
being taken, going for way more than the asking price. My
cousin put her house on the market and she sold it in 8
hours. There is definitely a frantic feeling in the
air. The open houses we've been too have been "tense" with
most people bringing their agents in tow.
I personally think it is because of the low rates and because of
all the taxes and rules that are going to be coming into
effect.
We are just going to sit tight for now. I could never
stomach bidding $100,000 more for a place. If space really
becomes an issue (when we have our 2nd kid down the road), we'll
rent out our place and then rent a separate place for
ourselves. I refuse to be part of a bidding war.
sporopat -- despite what someone else from canada said about
there not being a bubble, what you are describing is a perfect
description of a bubble. That's just not normal market
behavior. Wait a couple years, you'll buy a house
cheaper. The bottom isn't even in here in the U.S. and the
bubble has been burst for three years.
I've been following the real estate market in Ottawa for the
last couple years now. It's true that there's still high demand
here and it is very much a seller's market. However, I wonder how
much of it is being driven by low interest rates. The fact is
supply is growing at an accelerated pace, and I can't imagine
demand will keep up once the rates increase. For now the market
seems fine, but I have enough reasons for concern to keep renting
until things are more stable. The average price for a condo in
Ottawa has gone up 30% in the last year.
I don't know about a bubble, but house prices in Canada are
ridiculous. Was out in Penticton BC visiting my
father-in-law, and even there, in the middle of nowhere, crappy
little ranch houses on third acre or half acre lots are over
$400,000 -- more than they are on the East Coast of the U.S.
Mish Shedlock is an economist who was blogging about the US
bubbles and troubles a long time before they burst. He was
seen as "permabear", "buzzkill", "unrealistic" in 2006.
Remember Peter Schiff's warnings? Met with the same
defensive posture -- they laughed in Schiff's face at the very peak
of the housing bubble in the US. FWIW, Shedlock has turned
his attention to Canada. His articles on Canada (and there
are lots of them now) aren't written from opinions or bearish
feelings. He uses data and facts. Having Shedlock issue
warnings on your country is about as dire as Meredith Whitney
critiquing a bank.
China's Housing Bubble
Posted by matt on 17th of Mar 2010 at 10:47 am
here's an article, I know this is true, my wife is Chinese and she reads the news over there all the time and tells me about stories from her friends. It's a huge bubble waiting to burst. I could write a book on some of the stories that she's told me. The manipulation over there is unreal, and totally unsustainable
http://www.time.com/time/magazine/article/0,9171,1971284,00.html
It just so happens my
Posted by 55555 on 17th of Mar 2010 at 11:21 am
It just so happens my family have investments in Beijing & Shanghai and the returns are phenomenal - 3-7 times the return since 2001 and we have since took profits and rebalance our portfolio in other parts of Asia in HK and Singapore.
When you see a bubble, the first thing you do is you BUY it. (I believe somebody already said that) The same with trading, you go with the trend; dun fight it.
Manipulated or not, that's not really the question. (all financial markets can be manipulated by policies; people shld realize by now that free market is a fallacy)
Go with the trend.
The thing about bubbles is
Posted by matt on 17th of Mar 2010 at 09:46 pm
The thing about bubbles is that you need to have an exit plan and watch it closely, get out when you think it's done. Also sometimes bubbles are like musical chairs, you better have a seat when it pops!
now pure capital investments are easy to unload in most cases, it's when you have hard assets where you can get stuck. For example, take the housing bubble/bust in the US, it was far better to have sold your houses 6 months or a year before the bubble burst than trying to time the exact top. Because in real estate, once you miss the top, it's hard to sell and a lot of people got stuck, so it was better to sell early, even way early.
Yes the idea way to play a bubble is to recognize that it's a bubble (unlike the masses who can't) ride the 80% or so of the move, then try to exit in the late stages before it actually ends. It's easier said than done of course.
Great article Matt
Posted by kalinm on 17th of Mar 2010 at 11:16 am
The housing bubble is out of control in Canada, Australia and other big countries. Of course my Canadian friends all think "it's different this time". Speaking of "different this time", check out HSI and where it potentially topped... China's 9% GDP (and their insatiable demand for commodities) is supposedly what is fuelling Australia and Canada.... I heard that before.... in summer of '08, but it's "different this time".... we are in "Super bull"! Rally on!!!!
I am Canadian and we
Posted by bullau on 17th of Mar 2010 at 11:22 am
I am Canadian and we are nowhere close to a bubble in real estate..........Gimme me a break..........Prices have been resilient but are not what they were like in 2006 in the states..........There is actually high demand for real estate in the larger cities exceeding supply.
Toronto Housing - My 2 cents
Posted by sporopat on 17th of Mar 2010 at 03:51 pm
I'm just going to put my two cent in on this one. I live in Toronto and my husband and I are looking to upgrade to a house from our townhouse condo. We aren't in a hurry so we have just been casually going to open houses in the neighbourhoods we are thinking of moving to.
There are serious bidding wars going on and all the houses we have looked at have been sold in 24 hours from when offers are being taken, going for way more than the asking price. My cousin put her house on the market and she sold it in 8 hours. There is definitely a frantic feeling in the air. The open houses we've been too have been "tense" with most people bringing their agents in tow.
I personally think it is because of the low rates and because of all the taxes and rules that are going to be coming into effect.
We are just going to sit tight for now. I could never stomach bidding $100,000 more for a place. If space really becomes an issue (when we have our 2nd kid down the road), we'll rent out our place and then rent a separate place for ourselves. I refuse to be part of a bidding war.
housing bubble
Posted by Michael on 17th of Mar 2010 at 05:10 pm
sporopat -- despite what someone else from canada said about there not being a bubble, what you are describing is a perfect description of a bubble. That's just not normal market behavior. Wait a couple years, you'll buy a house cheaper. The bottom isn't even in here in the U.S. and the bubble has been burst for three years.
Ottawa
Posted by mvachon on 17th of Mar 2010 at 12:09 pm
I've been following the real estate market in Ottawa for the last couple years now. It's true that there's still high demand here and it is very much a seller's market. However, I wonder how much of it is being driven by low interest rates. The fact is supply is growing at an accelerated pace, and I can't imagine demand will keep up once the rates increase. For now the market seems fine, but I have enough reasons for concern to keep renting until things are more stable. The average price for a condo in Ottawa has gone up 30% in the last year.
Canada housing bubble
Posted by Michael on 17th of Mar 2010 at 11:35 am
I don't know about a bubble, but house prices in Canada are ridiculous. Was out in Penticton BC visiting my father-in-law, and even there, in the middle of nowhere, crappy little ranch houses on third acre or half acre lots are over $400,000 -- more than they are on the East Coast of the U.S.
Title: Mish Shedlock on Canada... Mish
Posted by kalinm on 17th of Mar 2010 at 11:34 am
Mish Shedlock is an economist who was blogging about the US bubbles and troubles a long time before they burst. He was seen as "permabear", "buzzkill", "unrealistic" in 2006. Remember Peter Schiff's warnings? Met with the same defensive posture -- they laughed in Schiff's face at the very peak of the housing bubble in the US. FWIW, Shedlock has turned his attention to Canada. His articles on Canada (and there are lots of them now) aren't written from opinions or bearish feelings. He uses data and facts. Having Shedlock issue warnings on your country is about as dire as Meredith Whitney critiquing a bank.
Here is one such article:
http://globaleconomicanalysis.blogspot.com/2009/08/fiscal-stimulus-canadian-style_31.html
Another interesting blog:
http://americacanada.blogspot.com/