Sanya Expat

As indicated in this recent release, Hainan property prices went ballistic starting in January...locally it is also very clear that there are more than a handful of owners with their properties for sale to lock in profits....very wise from our point of view...Cheers, Mario

Home prices in Haikou, capital city of Hainan province, soared 31.8 percent year-on-year and 19.5 percent month-on-month in January 2010, reports Xinhua, citing data from the Haikou Investigation Team of the National Bureau of Statistics. The rate of increase accelerated by 21.9 percentage points compared to the previous month, setting a new record high.

In January, prices of previously-owned homes in Hainan province rose 29.5 percent year-on-year, while prices of newly-built homes rose 33 percent year-on-year or 19.1 percent month-on-month. Prices of newly-built normal residential homes rose 37.8 percent year-on-year or 20 percent month-on-month. Prices of high-end residential homes rose 29.3 percent year-on-year, while prices of high-end apartments rose 31.5 percent year-on-year or 17.5 percent month-on-month.

This is China. And many of us know some of the rather unreasonable or obscurely complex policies which exist here. Someone I know recently needed to get a Sanya residence card and you would not believe the 5 step procedure the Sanya PSB informed her needed to be followed, making it virtually impossible to do. Problem solved, as usual, by asking a friend of a friend to obtain the document easily. Yes, guanxi remains a VERY important part of life in China.

Moving toward the article's main focus today, long time Sanya resident and friend David Sutton writes in recently pointing out the vagaries of how the property capital gains tax is calculated by the government. I argued with him that the gov't office would of course do an assessment to appraise the property value to calculate the tax. The same thing occurs in the United States to assess property-related taxes including the annual property taxes which we don't pay here in China, yet.

But David's incisive diatribe moves quite insightfully to the issues as he digs a little deeper:

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Many of us enjoy tropical beaches and Sanya is China's only true, genuine tropical beach destination. Over the past 3 years of development "Sanya" has become the catch-all word comprising the 160kilometer south/southeast coastline starting from the Kempinski Resort at Sanya Bay running up through Dadonghai, Yalong Bay and Haitang Bay to the Le Meridien Resort at the northern side of Shimei Bay. Over a period of four years since first arriving, Sanya has been good to us and many of our friends. I have gotten to know her intimately, in great detail, both personally and in terms of business and market research.

Today, I cannot encourage you to join the speculative fools playing the Chinese real estate and stock markets right now, including Sanya's property market. This is an ugly and unfortunate scene, with prices way too high, way too fast, even though it might continue a while longer. Less than 1 1/2 years ago a very knowledgeable local business owner and I sat over coffee discussing that prices in the area will most likely reach 20,000rmb per square meter "someday", probably two to three or five years later. Since then, prices have rocketed to over 30,000rmb psqm and higher. The cauldron of witches brew is boiling and buyers are stepping back.

Andy Xie, ex-Morgan Stanley China analyst in the U.S., has recently called the real estate and stock market rise in China a giant ponzi scheme. Strong words from a person we can rightfully call in the know. Please be sure to at least read his remarks further on down in this report. After exhaustively analyzing and watching both markets, I am grateful for the returns I've made and now I am getting very jittery at these heights, in full agreement with Mr. Xie.

"Looking more broadly beyond the real estate market, we can also sense there is a strong case of bias emerging from Chinese big business to subtly push foreigners out of China, as they come up with one big event excuse or another (Beijing Olympics, 60th National Day Anniversary, next the Shanghai World Expo) to severely limit visa permissions and make it harder to do business according to the recent scathing European Commission Annual Position Paper. The Chinese are perhaps starting to enjoy their little victory party as they seem to be the pied piper leading the world out of its economic crisis. America is cash broke. Europe is cash broke. Asia is flush with cash starting with China. That's the economic reality and in fact we should appreciate its importance and value." Mario Cavolo

Indeed, the global depressed economy is causing companies to cutback on expenses and one way to do that is to localize the expat management positions and send the expats packing as many companies have needed to do.

As I am the only person on planet earth who writes and publishes a reasonably accurate and detailed Sanya Real Estate Quarterly Report, that makes me the de facto investment real estate analyst of the moment whose job is to sometimes go out on a limb and call the bubble. There is always some possibility the bubble will continue for a few more years to even dizzier heights before it inevitably will burst. If so, it is I who am the fool today. If not, it is I the revered wizard analyst tomorrow. If prices are substantially higher in the next 2-3 years, that state of economic affairs will probably also reflect severe inflation and currency devaluation issues worldwide as the underlying financial crisis continues to unwind in ways we haven't seen yet. The unwinding of the crisis is far from over and we shall see.

Going into the background analysis of the property market here, I start by enabling you our valued and appreciated readers to understand this bubble very quickly by making you a genuine Sanya real estate apartment offer. Do take a moment to compare this sample Sanya real estate offer to other possible choices you have in China, and also compared to other possible countries in Southeast Asia, North America, Australia/New Zealand and the European Continent.

Go to the next page to view today's amazing ocean-view luxury apartment offer and judge the lunacy for yourself!

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...Yes as so many inquiries have been coming in recently, I'm playing detective around town these days on the Sanya real estate scene...fresh, juicy updates on the way in just a few days....meanwhile will someone please master the weather and get rid of the humidity...Cheers, M

I hit the latest updates hard today for reader updates and news on Sanya as we are departing for our one month holiday back to the U.S. We will be travelling in and around LA, Phoenix, Las Vegas, and New York until August 6th. We might even make it down to Florida if time allows.

Before the coming high season period, www.sanyaexpat.com will be moving into a major site upgrade including a community forum and monthly email newsletter in cooperation with the major site upgrade taking place at www.shanghaiexpat.com.

Advertisers and service partners are highly recommended to reserve and lock in lower six month and yearly rates quickly for banner spaces and special promotions available before the upgrade. Come high season last year our traffic doubled and service requests from all over the world for apartments, car rentals, tours and property were coming in daily. With the major upgrades planned, we expect traffic to triple again quickly as we hit this high season. Feel free to reference our #1 traffic ranking for Sanya websites at www.alexa.com

Please be patient with respect to our email replies for the next five weeks. Thanks to all of you for being here with us at SanyaExpat. Enjoy the summer! Cheers, M

My wife and I spent a perfect surfside afternoon 'til sunset at Dadonghai beach today amazed at how happily crowded it was. For the past 2 weeks, Sanya has had perfect weather so whether...

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