China: Real Estate Still Crashing \ stacker news ~econ

4097 sats \ 27 comments \ @TomK 8 Dec 2023 econ

The Chinese property market is going through one of the worst crises in its history, if not the worst. After a crash of over 80%, the question arises as to how the Communist Party can prevent further damage to the banking system. Will we see a similar development in Europe and the USA? Source: Barclays Research

view all related items

1093 sats \ 2 replies \ @MerryOscar 8 Dec 2023

I read this very interesting article the other day which is related:

Forest City: Inside Malaysia's Chinese-built 'ghost city' - https://www.bbc.co.uk/news/business-67610677

1 sat \ 0 replies \ @endothermicdev 8 Dec 2023

That's so wild! Imagine a $100 billion "oops, there's no actual demand." But apparently that's exactly what can happen when housing units become the monetary units.

0 sats \ 0 replies \ @TomK OP 8 Dec 2023

Interesting. Thank You

492 sats \ 4 replies \ @siggy47 8 Dec 2023

How do you see this ending in China? I assume there are many angry speculator homeowners with unbuilt apartments. What about capital flight? Is that reaching a peak at this point?

733 sats \ 2 replies \ @TomK OP 8 Dec 2023

Nobody that I know would be touching chinese markets now. Their apparatus is so strong that they can let go these shadow banks under and consolidate the real estate sector. But they are debasing the Yuan fast.... could make up a nice cover story for the EU sliding into the toilet. The US will be benefiting if they can finally get rid of the Davosian commies and re-build under the ''rule'' of private formation of capital.

21 sats \ 1 reply \ @siggy47 8 Dec 2023

Best case, but unlikely scenario.

217 sats \ 0 replies \ @TomK OP 8 Dec 2023

Wait for it... the destruction done by these people will lead to a reaction

21 sats \ 0 replies \ @TomK OP 9 Dec 2023

I found this data point. If we habe a need of valid data let mr market speak.

463 sats \ 4 replies \ @elvismercury 8 Dec 2023

Any idea of how this is being felt, practically, by Chinese citizens? Like, in the USA, I know how 2008 manifested in people's lives, but I have no sense whatever what it's like to be Chinese with this going on.

734 sats \ 3 replies \ @TomK OP 8 Dec 2023

Hard to get valid info out of this country but I remember some protests during the first Evergrande spectacle. They let them suffet. No bail-outs

229 sats \ 2 replies \ @Undisciplined 8 Dec 2023

I have a friend over there and it sounds like the employment situation for young people is pretty rough.

452 sats \ 1 reply \ @Diego 9 Dec 2023

Similar, I asked a friend and he said that that youth unemployment is a big problem. Particularly is rural areas. Property issues has been know for a while.

452 sats \ 0 replies \ @TomK OP 9 Dec 2023

Officially it's 25%. I read sth like 35% unemployment is more accurate

21 sats \ 1 reply \ @OT 8 Dec 2023

I think the inner cities of Shanghai and Beijing haven't really seen much depreciation. Most of this is happening on the outskirts and "smaller" cities no one really heard of.

The interesting thing is that they are letting it crash. I guess Xi really meant it when he said housing shouldn't be a speculation

50 sats \ 0 replies \ @xz 8 Dec 2023

I guess Xi really meant it when he said housing shouldn't be a speculation

To consider that the politburo has multi-year plans, downsides of encouraging speculation would have been identified long ago, yet willfully ignored to capitalize on investment until market sentiment shifted and a response became necessary.

True, certain areas will depreciate in a shorter timescale. I guess what will play out is a continuation of an illiquid, overinflated market in larger municipalities. If values drop ~40% that'd be popping the bubble, otherwise it's walking a tightrope to stem stagflation.

21 sats \ 1 reply \ @0260378aef 8 Dec 2023

Zero chance that that graph shows the change in real estate prices in China. Even outside of Tier 1 cities, where by any measure, there has been a substantial fall - but not a 75-80% one ... (and most of the value measured in yuan, is in Tier 1 and Tier 2 cities).

I'm guessing it shows real estate stocks? That would make perfect sense.

(Of course the usual caveat - you can't trust any statistics coming out of China, generally - if this is a stock price chart (aggregate over several companies), it may be coming out of HK rather than the mainland market, and generally that's substantially more trustworthy).

But without a link to the source or a mention of what the y axis actually is, I can guarantee people (most?) responding to you in the thread are assuming that it shows real estate prices.

1 sat \ 0 replies \ @TomK OP 8 Dec 2023

Yes, these are accumulated sector values. Prices are falling but not that fast

10 sats \ 1 reply \ @Undisciplined 8 Dec 2023

How much of this is fallout from the unfathomable Ghost Cities resource misallocation?

I saw a couple of those ghost cities first hand. It was eerie.

1 sat \ 0 replies \ @TomK OP 8 Dec 2023

Oh. This is difficult to measure. I read that they constructed an oversupply of 30 mio. ''beds''

25 sats \ 1 reply \ @linda024352 9 Dec 2023 freebie

And it will continue to come together

0 sats \ 0 replies \ @TomK OP 9 Dec 2023

Watch the markets.... oh oh