International financial institutions: China's real estate market is not too leveraged

-Reporter Tri Ye yesterday, the 15th session of the Lyon Securities China Investment Forum opened in Shanghai, the participating economists said: The Chinese government's economic policy in 2010 will be more cautious, on asset prices and inflation indicators will be closely watched.　　GDP growth is expected to be between 8% and 10% this year, and the consumer sector, which exports, real estate construction and recovery, will be the Troika driving this year's GDP growth.　　At present, the domestic housing bubble is not in yesterday's forum, the Chinese property market will become the United States subprime mortgage crisis, the Lyon economist made clear: the current domestic housing bubble is not big, the key is that most people still use a higher proportion of cash to buy a house, which is fundamentally different from the U.S. property market "Leverage is very low in China, but in the US you can buy a property without paying any cash as a deposit, but in China we see the lowest initial payment of at least 20%," said Rothman, an analyst at CLSA China. The ratio of down payment to 40% in the previous period has now reached 50%, which shows that China's real estate market and the United States are very different.　　"In addition, the United States has a lot of debt derivatives, the interest rate is very low, and at first did not need to pay cash, so the birth of the U.S. subprime crisis, in the Chinese market not so many varieties of heavy financial derivatives, but also better to avoid the crisis." "In China, a quarter of sales are from second-hand housing sales, and especially in coastal cities, we can see its new house sales may be more active." I see that the fundamentals of the entire housing market are healthy, not a lot of bubbles. Rothman that China's property purchases are mainly cash-driven, unlike in the US, which is mostly mortgage-backed.　　He advises the government to intervene in a modest way, focusing mainly on the problematic markets, rather than curbing the development of the entire property market.　　Property tax on the property market may not be bad in the media group visits, in response to a very concerned about the property tax, CLSA believes that the Chinese government in the next few years will introduce property tax, the mainstream of the international market has introduced a property tax, this is a good channel. "Property tax is not necessarily bad news for the property market, London, New York, Hong Kong, these markets have property tax, so over the years, is very healthy." The key question is not whether China will introduce a property tax, but how effective the tax rate is.　　"Rothman explained that the effective tax rate is not a nominal rate, but a real tax rate, such as the Hong Kong personal income tax is 16%, but there are many relief." CLSA believes that even if the property tax is introduced, it will not allow the agency to lose confidence in China's property market. "The key is to see how high the tax rate, will not be high to the purchase of people is a punitive tax rate."　　"Rothman estimates that effective tax rates are unlikely to reach this level, and the government's introduction is only to curb speculation, and the Chinese government has many financial instruments, such as interest rates, to adjust the market." And forThe current rate hike is expected to Rothman that the cost of capital or capital in China is suppressed, that is, the cost of borrowing is very low, which for many manufacturers, their entry barriers are very low, which shows that in many industries there is overcapacity, capital can not be effectively configured. "So I think that gradually raising interest rates to a rational level would be good for China's long-term capital allocation and would reduce overcapacity or bubble expectations in the short term."　　CLSA expects the government to raise interest rates in the second half of the year. Adjustment has limited influence on the real economy HSBC China, in its latest report on domestic property, pointed out that the latest round of policy measures for real estate control, focusing on raising mortgage rates and reducing the leverage of home purchase funds, targets speculative demand. The definition of the two suite is also from the second set of home mortgages that are explicitly family second suite. It also shows that policymakers are determined to curb the rise in house prices.　　"The HSBC China chief economist and co-director of Economic Research Asia Pacific, Qu Hongbin, said since the end of April policy since the start of the purchase wait-and-see sentiment again heating up, early real estate speculators also began to sell their inventory, these changes will soon be reflected in the adjustment of housing turnover, and in the next few months eventually reflect the fall in housing prices. "There are a lot of people in the market who worry that adjustment in the real estate market could have a big impact on the physical economy. We believe that this concern may be exaggerated.　　"Qu said that, mainly because: although the decline in real estate sales will lead to a slowdown in real estate investment growth, but related to speed up low-cost housing and other housing construction measures will help to support real estate investment growth does not fall too fast. "Since real estate investment accounts for about 20% of urban fixed assets investment, the cooling of real estate investment will bring about slower growth of fixed assets investment." However, a strong rebound in exports this year could boost manufacturing investment, which would also help offset the slowdown in real estate investment.　　"The decline in fixed asset investment growth may not be a bad thing," says Qu Hongbin, who believes the risk of further economic bias is still more pronounced. The proportion of mortgage-buying is still not high. When people see the real estate market overheating, they often overlook an important fact: China's real estate market is not excessive leverage, that is, the external effects of house prices are not so big for the banks or the family. At present, China's housing mortgage loans accounted for less than 15% of the proportion of bank loans, even if the developers to put the loans included, this ratio is less than 30%. In fact, China's housing mortgage loans in 12 years after the emergence of the relatively primary stage of development.　　Urban households with housing loans accounted for only about one-tenth of the total number of households, much lower than in the US and 70 in the late 80. Another factor that cannot be neglected is the close relationship with the housing reform in the 90 's.The low price of the house, the sale of a large number of people after a lot of urban families in the accumulation of wealth contributed to the family, but also make these families have the ability to buy their next generation to provide financial support. "For these reasons, the adjustment of the property market, fluctuations in the bank balance sheet and consumption growth impact are relatively limited." The price fluctuations of the previous round from 2007 to 2008 were referenced, and consumption growth in this period was not significantly affected.　　"The growth of consumption is unlikely to fall sharply," says Qu Hongbin, as investment growth continues to be underpinned by infrastructure investment projects, exports and job growth remains strong. CLSA Rothman also believes that although China has more people using mortgages than before, the overall ratio is not high enough: "For China, mortgages are manageable." ”