a second chance

[socalarm]

question for the experts. i’d really like help to figure this one out. how could we learn from the bubble here and apply the knowledge to a rising RE bubble elsewhere – china/india/poland ? assuming for the sake of argument, the RE bubble in these economies is still in an ‘early’ enough phase.
i have little idea about shorting mechanisms and won’t throw my savings into it. are there other smart ways to look at it?

[barnaby33]

See the thread on Mexico. In addition to the bubble problems you have to deal with being a non-native in those lands. I suppose you could try to take advantage of blowing bubbles in other countries, but ask yourself this. If you couldn’t accurately predict the bust in your native country, how would you do so in a place you don’t have intimate knowledge of?

If you have a good answer, I am so in.

Josh

[VCJIM]

I doubt you can purchase real estate in China as a foreigner (ybc and others sure to comment). Even if you could, though, you’d have to have balls of stone to actually go through with it.

[socalarm]

i guess my question was more hypothetical. knowing that a market would soon head south, and if you didn’t own RE in it, but could (say), what’s the best you could do? the market could be anywhere, even here for the sake of argument.
is there an alternative to shorting?

[ybc]

I think that you can buy real estate in China as a foreigner, but the rules might be different. I have friends who buy in China, but in their relatives’ names. Also, another thing to consider is that rules and regulations change in China, and they can change rapidly. To illustrate, here is a story that I heard from a radio segment in a taxi in Beijing. It was an auto talk show, and the caller asked whether he could sell his car. Well, it turned out that he couldn’t sell because a) his car wasn’t registered in Beijing, and b) he hasn’t paid off his loan yet. I don’t remember all the technical stuff, but the point is that what you take for granted here doesn’t necessarily apply in another country. The reason that Shanghai real estate market experienced rapid decline (at least the high end) is that the government changed credit requirement and holding time period requirement completely. Some of my friends are buying in secondary cities, and I’m sure that most likely they’d profit. As a foreigner, you might be the one who helps savvy locals to make their money.:-)

[lewman]

ybc’s right; I’ve been living in beijing for a year now and have been paying some attention to the local property market scene; the rules change every other month and recently new rules were published to make it harder for a foreigner to buy a flat, and that is on top of a number of recently added taxes to be levied only when you sell the property. Recently a friend (born and raised in china so speak fluent mandarin but he spent the last decade or so in the US and has gotten used to the US way of things) bought a flat; half way into escrow the property agent called my friend and said the seller wants to cancel the deal; my friend said “sure pay me double the deposit as it says on the contract and the deal is off”. To make a long story short, the so-called seller turned out not to be the title holder of the flat (he now claims he’s the brother of the flat owner), and the property agent and the seller teamed up to convince my friend to just take back the deposit and walk away. Consolation is it seems they’re at least willing to give my friend back the deposit.

Now imagine you don’t speak the language and you’re normally thousands of miles away …. hmmmmmmm

[powayseller]

A Chinese friend told me that in China, once you buy a property, you can only own it 70 years, and then the government takes it back; in essence, you are only leasing it. I think the gov’t could pay you when they take it back? This 70-year rule is for the Chinese citizens. A reminder it is still a Communist country.

[LookoutBelow]

Is this a joke ?

Lets see a show of hands here:

How many of us San Diegan’s would like to move ALL of their capital and place of residence to a dump like Mumbei,India ?

anyone ?

Anyone ?

Okay, now, how about Bopaul, India ?

Anyone ?

Alright then, How about Pakistan ?

Anyone ?

Anyone ?

Well then, how about to a Communist country called China ?

Anyone ?

Helloooo..Anyone ?

Huh ? I dont see ANY hands being raised ? I guess it was a brain fart question ! You can always tell those ones, because they smell like burning hair !…Do you smell that ?

Sheesh…. I love this site !

[socalarm]

that wasn’t ever the question…but i guess you were more interesting in smelling than reading

[Anonymous]

Ex-Patriots are New England NFL players who have been traded or retired.

expatriates are nationals of one country living and working in another.

LOL!

[ybc]

Stephan, very interesting!

What are the signs that made you think that China will have a significant economic downturn in the next couple of years? I know that the environment is ripe for it (heavy foreign fixed investments, significant mis-allocation of capital, etc), but I’m curious what signals a turn now for you?

I don’t visit China that often — once every couple of years.

[Author]

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