China Housing Bubble
China Housing Bubble
'Ghost towns': Evergrande crisis shines a light on China's millions of empty homes
Evergrande's unraveling is still commanding global attention, but its troubles are part of a much bigger problem.
For weeks, the ailing Chinese real estate conglomerate has made headlines as investors wait to see what will happen to its enormous mountain of debt. As the slow-moving crisis unfolds, analysts are pointing to a deeper underlying issue: China's property market is cooling off after years of oversupply.
Chinese authorities finally weighed in on the Evergrande crisis on Friday. The People's Bank of China said the company had mismanaged its business but risks to the financial system were "controllable."
"In recent years, the company has failed to manage its business well and to operate in accordance with market changes," Zou Lan, director of the financial market department at the Chinese central bank, said at a press briefing. "Instead, it blindly diversified and expanded, resulting in serious deterioration of its operating and financial indicators, which eventually led to risks."
The warning signs have been flashing for some time. Prior to Evergrande's meltdown, tens of millions of apartments were thought to be sitting empty across the country. In recent years, the problem has only gotten worse.
Mark Williams, chief Asia economist at Capital Economics, estimates that China still has about 30 million unsold properties, which could house 80 million people. That's nearly the entire population of Germany.
Real estate and related sectors are a massive part of China's economy, accounting for as much as 30% of GDP. The proportion of economic output related to construction and adjacent activities is "far higher than in other major economies," according to Williams.
For decades, that has helped the country sustain rapid economic growth.
But for years, critics have questioned whether that engine of growth was creating a ticking time bomb for the world's second largest economy. That's in part because of the massive debt many developers took on to finance their projects.
More at link
https://www.cnn.com/2021/10/14/business ... index.html
Evergrande's unraveling is still commanding global attention, but its troubles are part of a much bigger problem.
For weeks, the ailing Chinese real estate conglomerate has made headlines as investors wait to see what will happen to its enormous mountain of debt. As the slow-moving crisis unfolds, analysts are pointing to a deeper underlying issue: China's property market is cooling off after years of oversupply.
Chinese authorities finally weighed in on the Evergrande crisis on Friday. The People's Bank of China said the company had mismanaged its business but risks to the financial system were "controllable."
"In recent years, the company has failed to manage its business well and to operate in accordance with market changes," Zou Lan, director of the financial market department at the Chinese central bank, said at a press briefing. "Instead, it blindly diversified and expanded, resulting in serious deterioration of its operating and financial indicators, which eventually led to risks."
The warning signs have been flashing for some time. Prior to Evergrande's meltdown, tens of millions of apartments were thought to be sitting empty across the country. In recent years, the problem has only gotten worse.
Mark Williams, chief Asia economist at Capital Economics, estimates that China still has about 30 million unsold properties, which could house 80 million people. That's nearly the entire population of Germany.
Real estate and related sectors are a massive part of China's economy, accounting for as much as 30% of GDP. The proportion of economic output related to construction and adjacent activities is "far higher than in other major economies," according to Williams.
For decades, that has helped the country sustain rapid economic growth.
But for years, critics have questioned whether that engine of growth was creating a ticking time bomb for the world's second largest economy. That's in part because of the massive debt many developers took on to finance their projects.
More at link
https://www.cnn.com/2021/10/14/business ... index.html
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- Expatriate
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Re: China Housing Bubble
With the current, supposed "transitory" (about as transitory as COVID!), inflation, the real estate sector, REITs, is a smart option as a money storage, along with finance and resources.
Scent from Dan's Durians & Perfumierie
- newkidontheblock
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Re: China Housing Bubble
Nah, one of the fundamental obstacles is that everything in mainland China is a secret. Reporting concrete facts is a crime that can result in punishment or outright banning.
So there is ‘thought to be’, etc. The impact simply will never be known.
Just like the bill to build Versailles. The French king laughed and then tore it up.
So there is ‘thought to be’, etc. The impact simply will never be known.
Just like the bill to build Versailles. The French king laughed and then tore it up.
- newkidontheblock
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Re: China Housing Bubble
Now it’s an invalid URL.crob wrote:
The the thought police have already gotten to it an hour after posting.
Keep fighting the good fight.
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Re: China Housing Bubble
newkidontheblock wrote: ↑Sat Oct 16, 2021 6:59 amNow it’s an invalid URL.crob wrote:
The the thought police have already gotten to it an hour after posting.
Keep fighting the good fight.
That video recording was done years ago. They have both been out of China for at least a couple of years.
Re: China Housing Bubble
Cam.O'Dear wrote: ↑Sat Oct 16, 2021 7:26 amnewkidontheblock wrote: ↑Sat Oct 16, 2021 6:59 amNow it’s an invalid URL.crob wrote:
The the thought police have already gotten to it an hour after posting.
Keep fighting the good fight.
That video recording was done years ago. They have both been out of China for at least a couple of years.
true, but it does high light how bad it must be, if they stopped halfway through construction of these building in I'm guessing 2018
, then how bad is it now.... with the next question being, what the fuck is going to happen to sihanoukville?
Last edited by crob on Sat Oct 16, 2021 8:34 am, edited 1 time in total.
Re: China Housing Bubble
From the article:
The majority of new properties in China — about 90% — are sold before being completed, meaning that any setbacks for home builders could directly impact buyers, according to economists.
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