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> widespread practice in China of selling homes before they’re built But isn't that really the case in most countries these days (or at least those countries
by traceroute66 4y ago
> widespread practice in China of selling homes before they’re built
But isn't that really the case in most countries these days (or at least those countries where a home-buying culture is prevalent).
For example, a quick internet search for the UK suggests 40% ± 5% is the going rate for off-plan purchases.
- _fat_santa 4y agoIt's a thing everywhere but the issue is that there's just so much of it in China. I live in the US and you can get custom home built, but that segment of the market is the minority, as most homes are built then sold. The problem emerges when the majority of your homes are sold before they are built, therefore if any defaults emerge, there is nothing to collect on. The practice isn't the problem, it's the sheer scale of the practice that's the problem.
- bobthepanda 4y agoNot only defaults. Most of the developers are also over leveraged and so in cases like Evergrande even without defaulting on the part of the borrower, the units may never be finished.