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Comment on China’s Economy Could Soon Face A Massive Debt Crisis

solo@slrpnk.net ⁨1⁩ ⁨year⁩ ago

“The end of China’s property bubble is more likely to lead to a slow grind downwards rather than a sudden collapse,”

I suppose this is a possibility. For many years now western media have been talking about a lehman brothers moment but the liquidation of Evergrande in January 2024 - to my understanding - didn’t create this effect on the markets.

For people, the results of this real estate crisis are devastating, regardless. (relevant article)

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alcoholicorn@lemmy.ml ⁨1⁩ ⁨year⁩ ago
For which people? The people renting 2bds in major cities for 3-400/mo? The people who want to build a 2bd outside a major city for 50K+land cost?

It’s devastating for the people trying to make money off housing, it’s great for the people who need housing.

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- solo@slrpnk.net ⁨1⁩ ⁨year⁩ ago
  I’m sure you’re right about the people you mention, but they are not the ones I had in mind.
  
  So, just to clarify, I was talking about the common people, like the young ones that are mentioned in the relevant article I linked above.
  
  China’s Real Estate Crisis: Why the Younger Generation Is Not Buying Houses Anymore
  
  Between skyrocketing home prices, the housing market debt default crisis, and a shifting culture, China’s younger generation is facing a vastly different housing market than their parents.
  
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  - alcoholicorn@lemmy.ml ⁨1⁩ ⁨year⁩ ago
    That’s weird, every statistic I can find suggests mainland China’s housing prices have been decreasing since 2022. The whole reason developers abandoned projects was the projected cost went lower than what they’d spend finishing it.
    
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    solo@slrpnk.net ⁨1⁩ ⁨year⁩ ago
    
    every statistic I can find suggests mainland China’s housing prices have been decreasing
    
    After your input, I looked it up a bit more and found stats like the ones you mention (example) but also found others that paint a more complex picture (example 2 - you will need to adjust the timeframe). So not too sure what to make of them at the mo.
    
    The whole reason developers abandoned projects was the projected cost went lower than what they’d spend finishing it.
    
    My understanding is different: it was a ponzy scheme (see article).
    
    Having said the above, I am open to take a closer look at any link you would like to share that clarify or contradict any of the above.
    
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thelucky8@beehaw.org ⁨1⁩ ⁨year⁩ ago
That’s a good article, thanks for sharing.

Many (most?) experts agree that the crisis isn’t yet over (and possibly has not peaked yet), and China is in for long-term trouble. Many Chinese have ploughed their life savings (in the form of pre-payments) into their properties, and are now left alone with homes half-built, with no water or electricity, leaving their buyers with a shattered future and debts that they have to pay for the next 20 or so years. The Chinese government doesn’t provide compensation of any form for the damage done to these buyers.

Real estate was once considered a safe investment in China, but younger Chinese -if and when they can even afford it at all- might reconsider buying a house, and this in turn will be another major obstacle for the market to revive imo.

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