News Alerts. Oct. 11, 2013. Evening Edition. #RealEstate

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  1. Chinese Academy of Social Sciences: Shadow Banking Equivalent to 40% of GDP – Real Time Economics – WSJ

    The undisciplined grey lending source that exists alongside the traditional banking system has become vital to sustaining growth in the world’s second-largest economy, although some might argue it is more effective in keeping alive factories in industries with overcapacity and a property bubble.

    …Fitch Ratings estimated earlier this year that China’s total credit including various forms of shadow-banking lending may have reached 198% of the country’s GDP, while J.P. Morgan estimates have put it at as much as 69% of GDP, or 36 trillion yuan.

    Source … 09/chinese-think-tank-puts-shadow-bankin g-at-40-of-gdp/

  2. Patrizia Immobilien AG : Residential real estate markets benefit from risk aversion and low interest rate policy | 4-Traders

    Institutional investors in Europe are becoming increasingly interested in residential real estate. In the first six months of this year, the transaction volume rose by 34 percent year-on-year to EUR 12.9 billion, with the “safe haven” of Germany proving to be a particularly popular investment target. This is one of the findings of the fifth Residential Market Report Europe published by PATRIZIA Immobilien AG. “The sovereign debt crisis and the long-standing uncertainty about the future of the eurozone have strengthened the risk aversion of many institutional and private investors,” comments Dr. Marcus Cieleback, Group Head of Research at PATRIZIA Immobilien AG. He added that the lack of strong yield alternatives on the capital market is contributing to the high demand for residential real estate investments, while the low interest rate policy of the European Central Bank is having the effect that many conservative forms of investment are generating only low yields after adjustment for inflation. “In this environment, residential real estate offers comparatively high yields with a manageable risk,” Cieleback notes.

    The findings of the fifth PATRIZIA Residential Market Report Europe at a glance:

    Low investment risks in Germany, Austria and Finland …

    Residential market influenced by age structure of the population …

    Construction activity returns to normal throughout Europe …

    Growing activity among international investors …

    Investment decisions influenced by the 2011 census …

    High-yield residential properties in the United Kingdom and Scandinavia …

    Source … ILIEN-AG-489973/news/Patrizia-Immobilien -AG–Residential-real-estate-markets-bene fit-from-risk-aversion-and-low-interest- 17331518/

  3. As the U.S. endures an artificial debt crisis, China just weathered a real one (and came out even richer)

    We think this article by Max Fisher is premature, but he recovers a bit with the following:

    It’s possible that this summer’s effort was not enough to fully extinguish the credit bubble, making this year’s GDP growth artificially inflated by dangerous over-borrowing. And, even if the controlled burst worked, the Chinese economy is still slowing. That’s no surprise, but Beijing has to make some very big and difficult structural changes to its economy if it is to endure the slowdown — for example, by relying less on its exports and more on domestic consumption.

    Source … ldviews/wp/2013/10/08/as-the-u-s-endures -an-artificial-debt-crisis-china-just-we athered-a-real-one-and-came-out-even-ric her/