This is just a blip, as you said columbus oh.. Noone really gives a shit about those places except the western media, to be used for cherry picking. I remember there was another video a while back where they showed a ghost town in the middle of a desert as if somehow that's representative of china's market. You are right the poor/wealth gap in china is extreme, and many people cannot afford to own homes. But I just dont see what the big deal is if those ghost town in the middle of nowhere remains unsold, eventually the government(with close to 3 trillion usd reserve) will just write a check, "lease" the units as affordable housing and it's done You will *NEVER* (in the next decade) have a situation in cities that matter like shanghai/beijin, where people can no longer afford and begin mass defaulting on their mortgage, apts become vacant, and banks going under like what happened here. Because: 1) There is simply no leverage over there, all cash deals/50% down. 2) No upkeep: average $500k usd apt in shanghai cost $40/month total(tax+maintenance) vs $1k/month here for a $400k 1br near nyc 3) China has 1.3 billion people and the mass migration to the cities are just underway. The cities are full. 4) Everyone wants to own an apt, west underestimate the resolve chinese have at saving money. They will cut toilet papers to save pennies, then pool 3 generations of saving to buy 1 apt. -------------------------- In response to the video, where the guy said owning a home is a human right. That is flat out FALSE, shelter is a human right, owning your own home is a LUXURY, and an expensive one at that. It's only natural not everyone or even the majority should be able to afford it. The us government tried to give home ownership to everyone by leverage (and we know how that ended). The chinese now is trying by forcing the price to crash(without much success) and/or building affordable homes. also in the video they are saying the "rock slum" the couple lived in will be demolished for highrises/projects as if that's a bad thing, if it did happen, those 2 will walk away with at least a 6 figure usd tax free, possibly much more. Getting your home targeted for demolishing by the government in china is like winning the lottery...
china doesnt want foreign investment in their real estate market, they cant even satisfy their own citizens in the cities. If you dont have a chinese passport you cannot purchase real estate in china except if you can prove you are working there for at least 2(?) years in a legit company.
Grandluxe, .....I think TraderH , just meant to say ... that the Chinese are copycats . and they like to copy the USA in many ways.
Here are some changes to consider, occurring now and in the coming decade: - Wages in China have risen. They are no longer the low-cost manufacturing center. - Demographics. They have or will be reaching an inflection point soon. The number of young people entering the workforce is starting to decrease. - It's already overbuilt. Property prices are falling, for once. I'm not saying they can't keep this going for a few more years. But if something can't go on forever, it won't. -lf
agree with above, however ita may go for longer than couple of years if this sitaution benefits them greatly. Example GFC china: US 1:0
Special factors: 1. Probably the Chinese government is the single largest majority land owner of All the lands in China. 2. Probably the Chinese government (owning many banks, companies, resources and manufacturers besides lands and estates) is the single wealthiest corpoartion (earning the annual incomes from various taxes, rates plus valuable assets) among All the businesses in China. Then what would the Chinese Government do? " http://www.internationalappraiser.com/2011/05/beijing-housing-shortage.html Those who might consider Beijing housing prices to be a bubble, should take note that most bubbles collapse from falling demand or supply increases well in excess of demand, which so far does not seem to be occurring in Beijing. In American housing bubbles, one can observe that the most supply-constricted markets, such as Manhattan or San Francisco, suffer the least depreciation in economic downturns. One thing that prolongs the Chinese Bubble, too, is the lack of property taxes, which makes carrying costs low for real estate speculators. This is starting to change, now, with the cities of Shanghai and Chongqing instituting residential property taxes, with assessment rates ranging from .4% to 1.2%. This could curb speculation, although Chinese investors have few other choices of investments; Chinese stocks are considered riskier investments than housing and are down about 25% this year. One interesting twist to the Chinese housing market is that all properties are leasehold. The residential land leases from the government are 70 years in length. As is customary with leasehold properties, improvements must be removed by the end of the lease. This creates interesting repercussions for the Chinese housing market. What happens to resale value after a few decades? Will family heirs have considerably diminished hereditary rights to housing? What resale values are possible for older homes nearing the end of their 70-year leases? It will be interesting to watch this grand housing experiment. "