Hainan-Sanya-Haikou Expat

It is reported recently that, as across many bubbly spots in China, Hainan real estate has PLUNGED 30% from its high. Let's analyze this nonsense a bit closer.

June 17 -- CapitalVue News reporting that...

...Average transaction prices plunged 29.74 percent month-on-month...

The Hainan commercial residential property market experienced a significant decline in both transaction area and transaction prices since March this year, reports Xinhua, citing the provincial Department of Housing and Urban-Rural Development.

"...The province recorded a 19.05 percent month-on-month decline in the transaction area of commercial residential properties to 627,700 square meters in March. Average transaction prices were down 12.82 percent month-on-month to 12,280 yuan per square meter..."

Oh Really?...this roller coaster is getting to be nonsense, check out my real estate videos comparing luxury oceanfront apartment developments in Penang Island, Malaysia at 16,000rmb psqm to Sanya Bay at 42,000 psqm

Penang Island At One Third The Cost of Sanya Bay

Prices on Hainan did an orchestrated "pump and dump" jump of 50 to 100% in January....Lord help all those January suckers who let themselves get sucked in like addicted table gamblers in Vegas after the Wenzhou clan smelled money, went in, bought it all up, dumped it and went back home to leave the mom and pop retail buyers holding the bag, no different than the Wall Street game might I add and a sad commentary on greedy ways and fools in just about any country on earth...

So let me do the calculation: A sample newer beachfront apartment in Sanya was going for 15-20,000rmb psqm. In January, the price jumped to 25 to 50,000rmb psqm depending on whom you ask, and now the price has PLUNGED back down 30% which would make it 17,500-35,000rmb psqm...is that the size of it? Oh yea, now we all know the real prices and understand the real estate market.

Did you know that the real prices of properties is based in the U.S. on the MLS, the multiple listing system, where you can see the actual sale price of every property in a given neighborhood. Did you realize that the same information IS available in China. Go to the Sanya government property office to inquire about how many transactions there have been in the past month and at what price and guess what, that information IS available to you.

I am told by a number of experienced real estate agent that in Ban Shan Ban Dao there are dozens of sellers who all have their properties for sale asking over 40,000rmb per square meter and that there has not been one single transaction there since the January pump and dump. People who have their apartments for sale have them on sale at pumped up retail prices and don't really want to sell them, they're just fishing to find an idiot and unfortunately there are plenty of idiots out there.

Am I being negative? No, I'm being HELPFUL!

Missing the beach yet enjoying our Century Park Shanghai apt immensely,

Cheers, Mario

Link to Full Article Here

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:

Pages: 1 · 2 · 3

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!

Pages: 1 · 2 · 3

...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