Alan Kohler is one of Australia’s most experienced commentators and journalists. Alan is the founder of Eureka Report, Australia’s most successful investment newsletter, and Business Spectator, a 24-hour free business news and commentary website. He also hosts Inside Business, a half-hour Sunday programme on the ABC, is the finance presenter on the ABC News - and producer of the nightly graph (or two).
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With respect, I think the four dominant factors noted in your article do not demonstrate the basis for an asset price bubble, but rather indicate a justifiable basis for Chinese real estate appreciation (See China's potent housing cocktail, August 10). High domestic savings suggest lower LVRs, international investment control suggests a greater likely domestic demand for real estate, low ownership and holding costs reduce the likelihood of distressed sales and minimise short-termism, and increased urbanisation suggests ongoing end-user demand.
There is no doubt that the lack of transparency regarding Chinese markets and the Chinese economy generally makes it difficult to deduce the real situation, and the size and complexity of Chinese 'sub-markets' make generalisations dangerous, but the 'evidence' proposed in the article does not support the asserted outcome.
Comments on this article
Comments PolicyNo property tax?...Australian homeowners can only dream (See China's potent housing cocktail, August 10).
With respect, I think the four dominant factors noted in your article do not demonstrate the basis for an asset price bubble, but rather indicate a justifiable basis for Chinese real estate appreciation (See China's potent housing cocktail, August 10). High domestic savings suggest lower LVRs, international investment control suggests a greater likely domestic demand for real estate, low ownership and holding costs reduce the likelihood of distressed sales and minimise short-termism, and increased urbanisation suggests ongoing end-user demand.
There is no doubt that the lack of transparency regarding Chinese markets and the Chinese economy generally makes it difficult to deduce the real situation, and the size and complexity of Chinese 'sub-markets' make generalisations dangerous, but the 'evidence' proposed in the article does not support the asserted outcome.