China has erased over 2 decades of wealth
- Thread starter 40micmic
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Alternative headline: Housing in China the most affordable it's been in 20 years!
Now if only it could happen here!
Well if housing was now affordable, certainly the 100 million+ vacant homes would be certainly bought up by now in these ghost cities.
70% of chinese wealth is parked in real estate. This is their sole investment vehicle. This is a massive issue. With consumer confidence already at all time lows in a society that tends to save, what does this do to domestic consumption (which is one of Xi's primary goals in the upcoming 5 year plan.) Who is going to be spending money buying a house?
I have friends and relatives over there who are under water 50-60% on their primary residence. This is what they are hoping to pass down to their kids.
Dont know how many of us living here that are willing to take that much of a write down on our largest asset and say this is good for affordability
Any NIMBYS and greenbelts in China? Below is some immigration info.
I guess the developers over there do not lobby the government to increase immigration. LOL
Immigration Rate in China
The immigration rate in China has seen a significant decline in recent years. In 2024, China recorded a net migration of -318,992, which is a 43.81% decrease from the previous year. This trend indicates a shift in the country's immigration dynamics, with a net loss of migrants. The historical data shows that net migration has been a net loss in 2021, 2022, and 2023, reflecting a pattern of decline in the number of immigrants entering China.
World Population Review
I guess the developers over there do not lobby the government to increase immigration. LOL
Immigration Rate in China
The immigration rate in China has seen a significant decline in recent years. In 2024, China recorded a net migration of -318,992, which is a 43.81% decrease from the previous year. This trend indicates a shift in the country's immigration dynamics, with a net loss of migrants. The historical data shows that net migration has been a net loss in 2021, 2022, and 2023, reflecting a pattern of decline in the number of immigrants entering China.
World Population Review
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Its only a write down if you sell it. Assuming you paid down the mortgage and still need a place to live, what impact is there to you? Wouldn't you want your kids to be able to afford to buy a house too?
Is this a serious comment?
You pay 1 million for a property. Take out a mortgage on that 1 million (lets say 800k if you put the 20% down). The property is now worth 400-500k but you are still payingthe mortgage on 800k.
You dont see a problem with this? Look at the steepness of the decline. This is not healthy.
Take into consideration, a chinese family often relies on the savings of both grandparents and their own savings to buy a house which is now 50% the value. This is the only investment they have.
Yes. You're citing a unique example of people who bought at the peak. What about all the people who didn't? Were there no Chinese families buying houses a decade ago?
You paid 1 million for a property 10 years ago. Took out a mortgage for 800k with 20% down. The property shot up to 2 million but has since declined to 1.5 million. You still owe about 500k on it.
Even if the price declines further, all the way back to 1 million, you haven't lost anything. You've lived in the home. You've built equity. You just didn't make a profit.
Housing is not an investment. Its a place for you to live. And now, maybe your kids can afford one too.
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Again, if you saw a 50-60% correction here, the effects arent just limited to housing. A canadian economy where real estate is one of its main drivers would effectively collapse. Consumer confidence in the toilet. Nobody buying anything. Cars, electronic goods, renovations. The construction industry would be in shambles. Banking and finance would take a massive hit with foreclosures and deliquencies. All that revenue from property taxes that our government depends on to sustain social/welfare programs would be signifcantly reduced. Not to mention, the unemployment issue. But hey, now houses are more affordable but our kids wont have any income to buy these houses.
It isnt a unique situation. If you bought 5-10 years ago in china, you are severely underwater. People who bought at the peak are probably closer to 70-80% down. But whats another 10-20% of your life savings + your parents + your in laws and in many cases your grandparets wealth.
Again, if you saw a 50-60% correction here, the effects arent just limited to housing. A canadian economy where real estate is one of its main drivers would effectively collapse. Consumer confidence in the toilet. Nobody buying anything. Cars, electronic goods, renovations. The construction industry would be in shambles. Banking and finance would take a massive hit with foreclosures and deliquencies. All that revenue from property taxes that our government depends on to sustain social/welfare programs would be signifcantly reduced. Not to mention, the unemployment issue. But hey, now houses are more affordable but our kids wont have any income to buy these houses.
Im saying a decline of this magnitude is not healthy for any economy and actually underscores the moronic governance of the CCP.
You are correct. They dont own anything. They operate in 70 year leases. The lease begins once the developers "acquires" the land, not when the home owner takes residence.
This is a whole separate issue lol. The tofu dreg construction applies to all their industries within china
A renovated semi-detached house in Toronto just sold for under $700,000. What does that say about the market?
Average prices for semi-detached homes in Toronto have dropped about 18 per cent since the 2022 real estate peak.
Wasnt able to read article as its behind a paywall but i think the caption read 18% drop from the peak.A renovated semi-detached house in Toronto just sold for under $700,000. What does that say about the market?
Average prices for semi-detached homes in Toronto have dropped about 18 per cent since the 2022 real estate peak.www.thestar.com
Thankfully we got a long way to go before we reach the collapse of chinese real estate. But argument still holds, the negatives of 50-60% drop in our real estate market far outweigh the positive impacts of "affordability."
It's doing the same thing as the housing market in Canada. A global recession is already happening.
That's unfortunate. With rising interest rates and decreasing home prices, this is becoming a shitstormA renovated semi-detached house in Toronto just sold for under $700,000. What does that say about the market?
Average prices for semi-detached homes in Toronto have dropped about 18 per cent since the 2022 real estate peak.
