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Meh. I understand property is pretty much the only viable investment a person can make in China, but these investors should have known what they were buying. Ma
by zeroCalories 3y ago
Meh. I understand property is pretty much the only viable investment a person can make in China, but these investors should have known what they were buying. Makes me think of idiots that lost big in crypto. The bubbles value has already been spent, so someone is going to have to bag hold. Either the government should buy and forgive all the debt, or the investors should get fucked for overplaying their cards. Maybe they can fake their death or escape to another country.
- bobthepanda 3y agoThe issue is that the bubble should’ve popped probably even five or ten years ago, but then the government allowed credit extension and the bubble kept on. The recent hard lines, with no sign of easing after multiple defaults, is a new thing.
- dirtyid 3y agoTBF arguably RE bubble was being addressed 5-10 years ago, there was domestic construction slump in 2012-2017 - where indicators like floor space completion and construction employment peaked. Then 2017 crack down on shadow banking which drove developers + local gov to increase presales, turning it into a financial instrument to keep the taps going. Then hard 3RL in 2020. Could have probably smashed skulls sooner and harder though.
- bobthepanda 3y agoWith how big the bubble has gotten a painful explosion was going to be inevitable no matter what. Markets considered expensive in the West have significantly lower house price to income ratios. In San Francisco it is 12.3x, in London it is 13.9x, in Paris it is 18.8x, and in Shenzhen it is a whopping 40x.