Rolls Royce Sales Fall by 54% in China in 2015


Blog by Arnold Shuchat | January 11th, 2016


This hot off the press from the Guardian about Rolls Royce sales in China.  I rarely believe anything that the Guardian prints, but this article, being apolitical seems harmless enough to be true.  It seems anti-corruption laws are freaking wealthy people out who are attempting to draw less attention to themselves by not driving as fancy cars......:

http://www.theguardian.com/business/live/2016/jan/11/china-stock-market-5-percent-europe-ftse-live#block-5693a971e4b0f2d1f22c6e76

Local real estate players must be wondering what the effect China's stock market will end up having on our market. Last week, the Chinese stock market declined 7% on 2 separate days to bounce back only slightly for a net loss of 10% for the week.  Market circuit breakers which pop after a 5% decline failed to stem the halt.  Today, there was a further 5% decline in stock market values.

This devaluation and the tremendous excess capacity in Chinese real estate, high vacancy rates, over supply of commodities with lack of demand, will force Beijing to shutter factories, perhaps devalue the Chinese currency and will cause financial players much stress.  The big question is whether the need to get money out of the country will trump other concerns.  With the Chinese New Year only weeks away, it will be interesting to see whether foreign property owners feel the need to sell local real estate to cover margin calls for Chinese stock market losses, or whether visitors will be bringing suitcases of cash to load up.

Inventories of property are near their all time low here with prices at an all time high, and unless new product comes to the market, there should be additional price pressure here in the new year. Stay tuned!  In the mean time, the Chinese currency is up slightly (1%) against the USD.  As far as we are concerned here, our CDN dollar is at a significant discount to what it was last year and that discount has been partially offset by a robust local real estate market.

It may just be time to think about buying some Arctic Tundra acreage to grow your own crops during the inevitable "global warming" which will protect your weekly grocery bill from the invariably higher prices.  Watch our currency devalue more, our food  and interest costs start to rise, our currency reserves fall and our national options start to diminish as Canadians begin to break out the weed and get obliviously happy as our government spends away our piggy bank. BC is looking better than anywhere else right now with the exception of Saskatchewan. Thank you real estate!