Tuesday, December 13, 2011

Falling home values. Debt-strapped borrowers. Real estate woes dogging the economy

China's housing bubble is losing air

Home prices and sales plunge after China's government intentionally slams on the brakes. Some recent buyers stage demonstrations, destroy real estate offices and demand refunds of up to 40%.

Posted by mark @ 11:22 AM (3523 views)
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13 thoughts on “Falling home values. Debt-strapped borrowers. Real estate woes dogging the economy

  • This guy has the british mentality

    “The swift turnaround has stunned buyers such as Shanghai resident Mark Li, who thought prices had nowhere to go but up. The software engineer closed on a $250,000, three-bedroom apartment in August, only to watch weeks later as the developer slashed prices 25% on identical units to attract buyers in a slowing market.”

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  • And I bet he is earning around $15,000

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  • Awesome, fantastic, cheers me up no end 🙂

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  • china is of course the elephant in the room with a housing bubble ten times worse than the USA

    but don’t worry it will be a soft landing…apparently!

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  • Since China opened up to communocapitalism it has only known growth in all things… and the Chinese can’t deal with or comprehend a downturn. This is new territory for them… get ready for riots in the street, and the biggest bubble burst of all time (until now).

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  • @ 3 & 4 What effect could this have on our housing market for it to be good news or the elephant in the room ? I’m not being a Knobber just curious on your thoughts?

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  • well…whats the betting our banks are exposed to a china slowdown/crash?

    they are involved everywhere else.

    no doubt they were exposed to get in on the growth countries of asia…unfortunately the growth has again been delivered using stimulus

    i.e printed money

    have the loans at these banks in china been packaged and sold all around the world?…you betcha!

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  • mark wadsworth says:

    HM, probably no direct effect, it’s just the general mood music, plus it will be interesting to see what the social impacts of this will be in China. Rumour has it that the “hard working middle classes” have invested their life savings (they usually buy without mortgages) into buying these new builds at inflated prices which then just stand empty.

    Clearly, somebody somewhere pocketed all the money for the land/bubble value, presumably some Party apparatchicks, so the question is, will the duped middle classes then revolt, or jsut take this massive theft on the chin, what? Hey… maybe they’ll even start renting them out to try and cover their losses a bit – or is that too crazy an idea?

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  • I do know a lot of chinese have borrowed against property in china and invested in property in the USA, i assume this could be the same for their investments in the UK too, if they go bust as an investor is it possible the property they own abroad could go into default ??

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  • of course it will have an effect…chinese have been buying into the central london property bubble.If they go bust at home,all their assets will be affected

    trouble is due to the globalisation of risk management,the very purpose of which was to reduce risk.

    unfortunately everyone has done the same thing all over the world,so everything has become more risky!

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  • maybe the chinese have been investing in the indian slums after all $53,000 for a shack made from old pallets on land you don’t own is a bargain surprised assettz hasn’t seen that opportunity yet

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  • perhaps we will see ‘inside track’ get their noses in the trough

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  • I remember reading on wiki that average property price in Chinese metro areas reached about 50 times (yea, 50 times not 5 times) of average single income at the peak. All the Chinese have to do is cease to eat, drink, shxt, move or even breathe, then they can pay back the mortgage.

    You see. Obviously, UK properties are hugely undervalued.

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