Report THE GREAT BIG CHINA THREAD in House prices and the economy Posted 6 minutes ago 21 hours ago, Saving For a Space Ship said: If China's economy keeps stumbling, it won't just take down Beijing — the whole world will collapse with it https://www.businessinsider.com/china-economy-xi-jinping-evergrande-debt-american-world-fallout-2021-10?r=US&IR=T An interesting take from Wolfstreet - China is covered with empty flats, bought in anticipation of capital growth, and prices are now falling... (how many london flats have been bought for similar reasons...) Anyway https://wolfstreet.com/2021/10/22/chinas-model-of-dictated-economic-growth-blew-up/ "And by late 2018, 87% of home purchases were by people who already owned at least one home. They were buying to speculate in real estate. The numbers are just gigantic. There were about 1.6 million acres of residential floor space under construction at the end of 2020, according to government data, cited by the Wall Street Journal. That would equate to tens of thousands of apartment towers. I did a little math. The average apartment size in China is said to be 60 square meters, according to the internet. That’s 646 square feet. New construction may be larger on average, but we’ll run with that number. So 1.6 million acres of floor space under construction, at 646 square feet per apartment on average, would mean that there are 108 million apartments under construction. Let that sink in for a moment: 108 million apartments under construction, when urban homeownership is already 90% and when the working-age population has been declining for nearly a decade. So this has been the business model: Build it and they will buy because apartments have become financialized investment products purchased for capital gains, and not yield, since relatively few of these apartments were rented out. But there are carrying costs for apartments. If they’re not rented out, and if they’re dropping in prices, investors get into a very sour mood very quickly, and they’ll go demonstrating in the streets, at which point the government starts thinking about bailouts to avoid a social explosion. But even bailouts cannot revive the old business model that led to all this. It doesn’t come at a surprise. The warnings have been sounded for years. What’s surprising is that it took so long. Total sales among China’s 100 largest property developers plunged by 36% in September from a year earlier, according the Wall Street Journal. Sales by the 10 biggest developers, including Evergrande, collapsed by 44%. Developers resorted to discounts to dump apartments, and those discounts hit prices in the overall market. Home prices dropped in 16 out of 31 divisions – that’s the 23 provinces and the cities that are administered by the central government. This was the first time since March 2015 that home prices dropped in a majority of the 31 divisions, according to official data. "