64 Million vacant apartments in China!!!!!

Discussion in 'Economics' started by S2007S, Jan 24, 2012.

  1. S2007S


    An EXTREMELY interesting video I came across, watch it 2 and 3 times to get an understanding whats happening in China.... any analyst that says China is going to experience a soft landing is a fool, they are going to have a hard landing just like the US and once China starts to slow the rest of the world will slow with them meaning world wide recession.

    Basically they are building to keep GDP growth high, they have to meet their GDP targets and the easiest way to do it is to build, build, build. No one can afford the new developments that China is building since prices are in a bubble and wages so low.

    <iframe width="640" height="360" src="http://www.youtube.com/embed/SIzbMT2NVDA" frameborder="0" allowfullscreen></iframe>
  2. Timeframe for the hard landing?
    Calling a hard landing there is pretty easy, unless all the laws that markets live by have suddenly been canceled. Timing it? Not so much.
  3. S2007S


    Time Frame 1-3 years!
  4. doublea


    So knowing 1-3 years, how do we profit from it?
  5. You don't. It will completely change the world. The concept of money and wealth you have will be obsolete.
  6. I don't think so. Chinese government controls the housing market. More than half of the people buy apartments by cash, 100% cash pays off, and banks force 50% down payment for the second apartment, and most Chinese only buy what they can afford, that's why they have high percentage of savings. Most of people owns multiple properties are the government officers, rich people. US banks gave loans to all the people who wanted it, even if they have no penny savings, their banks only offer people who can guarantee to pay back. Their housing price will go down, but will not be a crash like us.

    Your post shows that you don't really know about China, they copy everything from US, and even the police station, they use the word "POLICE" instead of Chinese word, they are crazy, but they won't be crazy to do the same mistake as US did.
  7. timing : not yet. first current bull market has to end. just started
    so give it at least a year :)

    cash buyers - i have better name - alternative lending sources.
  8. AK100


    China's different it can't happen here!

    I've heard that lines a few times in the past :)
  9. pma


  10. achilles28


    You're right. It's more complicated than 'XX' million unit overhang, or whatever.

    Mortgage standards (100% down, 50% down etc), available terms, average income, home prices, cultural proclivity to take on debt. It's all relevant. If what you say is true, there's no bubble in China. My understanding is Chinese shun debt. IOW, the consumer credit revolution has not yet begun. Given that, once the PRC and Goldman get Chinese consumers hooked on debt, there is no bubble. A 50K property on 6K income is doable. 100K property on 12K combined household income is doable.
    #10     Jan 25, 2012