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Well, it has shown really dangerous signs for a while..
reference: the largest Chinese language TV news network outside of mainland – NTDTV.
Opinions and thoughts…?
Same story on a “miniature” scale happening in Great Britain.
Yeah, when over half of the houses/apartments on the market are being sold or rented by investors instead of actual families, you know something bad is about to happen. I say it’ll reach breaking point sometime within the next 10 years.
*Yawn*
This has been an ongoing story for years. There’s also nothing wrong with people buying additional apartments to rent out. Lots of countries have a near half or less than half home-ownership rate. Renting is perfectly fine, and helpful for the economy in many ways.
@Danny
I say there will be a gigantic earthquake in Asia sometime within the next 10 years.
^ Equally insightfulOk guys, did u check the clip ? Its not talking about home owners renting their multiple apartments..ap
Checked out the news clip. I don’t see anything indicating collapse any more than usual… a couple % decrease in sales price in inner-beijing isn’t significant, now it’s only 30k/sqm? Chengdu is still floating around 10, we’re safe 😛
No doubt it’s coming – the question is when? Prices starting to come down are a good thing though, whether the crash is tomorrow or next year. I hear a lot of Chinese people commend Xi Jinping on how he’s made defusing the housing situation one of his priorities, and it is good to hear that it’s being seriously acknowledged and addressed. Difficult to say how much of a crash it’s going to be though since the nature of these constructions are so different from things like sub-prime in America.
I’m not too familiar with the situation in the UK but the article that you linked to makes it sound much more similar to the situation in America pre-2008 than China right now.
The real estate market is so, so incredibly tightly tied in to the social stability of the country that I have a hard time imagining the government not doing whatever they had to in order to prevent a “collapse” from happening.
There was a horde of people outside of a rim-of-chengdu development that dropped its price from like 10k to 8k in a month, and all the people who had already bought a month earlier at 10k were furious and started a protest type thing that made news, imagine a COLLAPSE. The whole country would wtfplode, and the rich who lose so much would no longer be so protective and supportive of the gov’t that made them rich when the cash dries up. Don’t underestimate the party’s will to survive, fellas. 😀
Indeed, Uk’s situation is something like was in the States. Completely saturated.
Well..you probably have heard that China replicated its credit bubble within 5 years by multiple times compared to the West. The official credit bubble is atm 24 trillion dollars, and likely, even more due to their hidden books. Its the grandest scale in the history of the Universe 😀We shall see an interesting time IF we gonna b here during the crash…
Whatever we might speculate here, it is true, that no one predicts the actual outcome.
I’m personally just so fascinated about these catastrophic conditions, exciting discussion.Exactly Rick. And another related fact is, that since 1997, around 18 000 rich CCP officials have so to say “escaped” the mainland with their families and assets with the total worth of more than 300 billion rmb. It has been linked to their fear of the eventual collapse of the party and its fraudulent system.
Here’s my another questions guys…would it be safe to be around?
“It has been linked to their fear of the eventual collapse of the party and its fraudulent system.”
Or the fact that corruption over a certain amount of money in a political system that is CONSTANTLY consuming itself (it’s true dog-eat-dog in Chinese politics) nets you *death*.
RE: “safe to be around”
Do you mean if there is a housing bubble/collapse? That’s hard to say. If it was a bunch of angry people, they’d be angry with the government – not foreigners. The government would likely drop the PLA on full scale deployment to keep people corralled and controlled while they figured it out (that’s what they’re actually scaled to do anyways :P) but I have a hard time seeing how they could spin that into anti-foreigner resentments. So I suppose I think it would be _safe for us as foreigners_, how safe would be dependent on how f’d everything got after a major financial catastrophe. The same thing could be said about most any country with massive financial collapse – was it safe for tourists in Greece when Greece wtfimploded? I’m guessing yes..Here’s my another questions guys…would it be safe to be around?
I agree with Rick, the fury will be with the CCP, not expats. In these kind of catastrophic situations there really aren’t many places that are safe. We would just have to exit the country, but economic collapse would probably follow us wherever you go, so you may be best off going to somewhere far from a city.
Indeed, the whole magnitude is now global. No matter where will the down spiral start (the West or China), it will shake the world.
Now, what about CCP’s possible easing plan. How on earth they would have a soft landing? Dumping another 2 trillions of the US bonds will create another hole…“How on earth they would have a soft landing?”
One benefit of a dictatorial-style government is that they can control the markets much more directly. When shit happens it’s typically because they allow it to happen unless it involves FDI or forex in some way, which China has significant leverage to control also – US can’t afford to have China’s economy tank, for example, so wouldn’t try to help it in that direction.
@Dick in China
If you have to try to make other people look dumb just to make yourself look smart, you’ve already failed.
The prices are all guesstimated. There is no real house survey system in place in China it’s just made up. Our apartment we bought at 5000rmb a sq meter at the start of 2013. This year the block opposite in the same complex is now starting at 8000. The property company have left three blocks empty because they are waiting for the metro line to open.
On Saturday morning the sales office opened at 6am to sell the block opposite us. Some people queued over night to just a get a lottery ticket so they could get a chance to buy one apartment… The sold all of the apartments in one day.
The sold all of the apartments in one day
That’s exactly it Ian. There are some areas of town that sell out extremely fast, and others that are very lagged in sales, but the housing market is still pretty strong in general here.. and as salaries continue to rise, people will continue to buy.
I think that a lot of the studies talking about crashes are focusing on the extremely expensive cities like Beijing, where the cost is a multiple of Chengdu per sq.m..and it simply _has_ to come down, there isn’t enough people making enough money to continue to drive that kind of price up (I don’t think…). And as for investors, it’s not easy for people to invest overseas – so domestic real estate will continue to be kept pretty strong just on the rich needing somewhere to diversify.
Interesting.
I would really like to know what did Danny mean with his post??
Anyways, Ian, You said there is no generic survey system for having a price overview??How is that possible?
I’ve read that almost every second apartment made, is unsold. Regarding the comparison of boiling Beijing and skyrocketing Chengdu, it definitely means, that different regions start to default at different times but that Chengdu is also heading towards hyper inflated real estate market.
@Margus
There are some areas where developments are HIGHLY uninhabited. There are others where they fully sell out. “Second apartment made, is unsold” is kinda a nonsense statistic – there are so many factors to consider when figuring out property developments and stability that we can’t just pick a couple ‘random facts’ with no context and predict the volatility or future with any certainty. In other words: as long as the apartments around me are being fully sold at a high price, and if people are buying, I don’t fear the market collapsing around us.
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