• @mind@lemmy.world
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    381 year ago

    An oversupply of housing sounds nice coming from a place where rent cost 60% of my income.

        • cassetti
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          101 year ago

          What most people outside China don’t understand is that real-estate has been one big scam. See, developers have been building skycrapers filled with condos. They tell the chinese people “Westerners are investing in second homes - it’s a great nest egg investment for retirement! The property values will increase over time!”

          The problem is that in the Chinese culture, people do not want to move into homes furnished by someone else. They want to customize and build the home to their own needs. As such all these condos are essentially empty - just bare walls with no trim, no paint, no furnishings, no kitchen cabinets, appliances, etc. It’s not a “home” it’s an empty canvas to build whatever you want…

          Except it turns out nobody wants to live in an empty ghost town filled with shoddy constructed skyscrapers.

          So that’s how you end up with households that own 4-5 ‘homes’ which are really just empty condos in empty skyscrapers that nobody wants. And now many people are waking up to the ruse and simply refusing to pay their mortgages on these second/third/fourth homes. Which is resulting in many major developers going bankrupt. (There have been multiple, but here’s the latest developer in china flashing warning signs - https://www.reuters.com/world/china/chinese-property-developer-guangzhou-rf-faces-bankruptcy-restructure-demand-2023-07-13/ )

          You can read more here - https://www.wired.com/2016/02/kai-caemmerer-unborn-cities/

          Oh and fun side note - many venture capitalists inside America saw these developers building all these skyscrapers in China and decided to invest in these huge corporations. A fair amount of large financial institutions have bet big on these developers in China, and are going to lose their asses as these developers go bankrupt. It is already having a ripple effect on the US Stock Market as well.

  • AutoTL;DRB
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    111 year ago

    This is the best summary I could come up with:


    Investor confidence in China’s troubled property sector has been rocked again this week by reports that one of the country’s largest private building conglomerates missed interest payments on two bonds.

    On Tuesday, state-owned media outlet Paper.cn, citing an anonymous company source, reported that Country Garden suffered “temporary liquidity pressure” due to deteriorating sales and a difficult refinancing environment.

    5 by sales in the first half of this year, according to the China Index Academy — a leading Chinese real estate research firm, a sign that even the biggest players in the industry are suffering from the worst slump the country’s property market has seen.

    “If Country Garden, the biggest privately owned developer in China goes down, that could trigger a crisis in confidence for the property sector,” said Edward Moya, a senior market analyst for Oanda.

    “The downgrade reflects our expectation that Country Garden’s credit metrics and liquidity buffer will weaken due to its declining contracted sales, still-constrained funding access and sizable maturing debt over the next 12 to 18 months,” Kaven Tsang, a senior vice president at Moody’s, said in a statement.

    Last Monday, Premier Li Qiang pledged to “adjust and optimize” policies to ensure the healthy and stable development of the property market, urging cities to roll out measures that meet their own needs,


    I’m a bot and I’m open source!

      • @Burn_The_Right@lemmy.world
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        11 year ago

        Who knows?! This is totally new territory! Hey, I have an idea! Maybe the traders can start off-loading risky debt onto eachother like it’s a party game at a drunk frat house!