Why China’s Property Crisis is Still Getting Worse
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- Опубликовано: 11 сен 2024
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Following CCP's unsuccessful attempt to save the Chinese housing market, the property prices continue to fall and now stand at nearly 8% YoY. So, in this video, we're taking a look at what is driving this slump, and whether it could get better anytime soon.
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CORRECTION: At 1:33, when we show a graph comparing house prices to incomes across various cities. On the Y-axis, there are percentages after the units, when there should in fact be multiples. Apologies for this error, and we hope you nonetheless enjoy the vid!
no, i did not enjoy the vid because of this error.
In fact the property collapse does not made China economic collapse like 2008 USA
@@carkawalakhatulistiwaYou probably don’t understand what you are talking about:
How is economic collapse measured? By GdP. In China, GDP is an Input, not an output, and is manipulated to never fall. Economic activity however in China is not good.
Also Chinas housing bubble has not yet crashed, and the real disaster is the loss of household wealth, not GDP, as GDP is made up of consumption, export minus import, gov. spending and investment.
Thanks I wrote about it but deleted my comment once I saw this.
I highly recommend you read “visual representations” by Edward Tufte.
A very interesting helpful book, do not be put off but the title.
Make video on srilinka and pakistan economy
fear a housing crash due to people buying homes above asking prices with little equity. If prices drop, affordability and potential foreclosures may arise, worsened by future layoffs and rising living costs. I want to invest more than $300k, but I'm not sure on how to mitigate risk.
Consider reallocating from real estate to other reliable investments like stock, crypto or precious metals . Severe recessions offer market buying opportunities with caution, as volatility can yield short-term trading prospects. Not financial advice, but it may be wise to invest, as cash isn't ideal in this period.
It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to around $750k.
this is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? i'm in dire need of proper portfolio allocation
There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’ Melissa Terri Swayne” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
I just looked her up on the internet and found her webpage with her credentials. I wrote her a outlining my financial objectives and planned a call with her.
I hate the fact that most economies are set up in a way where house prices falling is a crisis
*ALL economies. Same thing happened in communist countries like China, Vietnam or even Autocratic countries like UAE or Russia.
The CPC is doing this purposely. The western capitalists point and laugh, but they have predicted China's fall since the 80s. Despite these predictions China's economy has only grown.
FR, treating housing like a stock market was a mistake.
Dude this is a property of markets, not "how most economies are set up". Its an inherent result of the fact that houses have value and can be invested in.
Because when house prices fall, nobody wants to create more homes. For most economies, this could mean recession, but for China whose economy is 1/3 real estate, this is an economic catastrophe.
Falling property prices should happen and it's a healthy development. Bubbles should not be kept inflated for ever.
All of the flesh is naught but inflated bubbles & interlaced pyramid schms. Turtles all the way (down).
Not really if your government balance depends on it. (selling the land)
Tell that to Canada and Australia who are in a perpetual bubble to remain relevant
Nothing of this is "healthy" development. A system where to have plenty becomes a crisis is only proper to Capitalism. Total madness.
Not when crashing market spells distaster for economy especially in totalitarian nation like China where in addition there's potential for revolution making crisis even worse.
Step 1. Invest in property for speculation and personal wealth purposes in a country with a falling population and no immigration
Step 2. ????
Step 3. Profit?
Step 2: get the money out of the country.
There is only one India that can provide such amount of cheap labour. (And they are in conflict with each other)
The problem is that the CCP and the investors thought the economic prosperity and the relaxation of CCP on the "1 child policy" are enough for the Chinese people to change their mind about having more children. They thought their prediction is correct, even though most of developed countries already having declining population growth despite the average GDP per capital increased.
@@jeremyrain99 Successful societies don't reproduce at the same rate that Third World Countries do. This is why the population in Africa/South America is still exploding, whilst population numbers in most of the western world/Asia are starting to falter.
And then there is India... the black sheep of the global trendsetters. lol
Step 2 is collect underpants
15 cities in China stopped publishing realized prices on 2nd hand homes because they are so far below state mandated values.
State mandated value. That term right there is a huge red flag (pun unintended)
source: i pulled it out of my ass
This is such a modern authoritarian state approach.
Don’t have a good results? Lie about it or just don’t publish it.
@@yunleung2631 Pretty sure that has always been the authoritarian way - lie about the situation, on every level.
@@predabot__6778 This kind of reminds me of what I read about the Great Leap Forward too. Apparently local government officials just lied about production goals.
The Hukou system pretty much boils down to "Be poor in your home town or be a slave in a city," which pretty much warps the calculus for buying a home.
Socialism is bad. Who knew?
Definitely not very socialist lol
I think the hukou system was intended to limit the movement of people, so the government can properly make "5 year plans". But economic incentives created by special economic zones are too great, people are willing to become second class migrant workers. Residents with hukou in these zones aspire to be landlords to the migrants, thus the housing bubble.
Step by step 😂 look at Mumbai 😂
@@me0101001000
They have transition to capitalism along time ago. Obviously communism has failed.
The cost of housing in Shanghai is over 40 times the average income of the city.
Keep that in mind when you consider rising or falling prices.
Shanghai seems to be the least affected place in China by this crisis.
And yet over 80% of Chinese people own property compared to only 50% of Americans. Stop making up shit.
Who here, is looking for that there?
That's because of malinvestment. The rich and the middle class have been essentially forced to pump their savings into housing, but that's not a productive asset.
Kinda the same in mumbai
"Moral hazard" is only ever thought of when regular people might get debt forgiveness. There's never a moral hazard for bailing out banks, corporations, and the rich. Debt jubilees were common and regular all throughout history until the enlightenment. The late, great David Graeber has much to say about this in his book _Debt: The First 5,000 Years._
Instead of giving the big companies free money, the governments should ask for shares in the companies in return for the money.
Thumbnail lookin like one of those "China WILL explode in 10 DAYS!" videos
Running the same narrative
It looks the same as any other thumbnail on this channel.
China is about to Completely Collapse!!
This video is way less clickbaity than the ones claiming China is about to implode, it's simply stating that one specific aspect of the Chinese economy continues to get worse, which is true.
@@zibbitybibbitybopAffordable housing is good.
I swear every time I see one of these videos I think "Why does TLDR upload at 3 AM?" Then I remember how timezones work.
Haha, the opposite for me is true. As a European, it's kinda refreshing to not get uploads at 05:00 in the morning.
@@Chrissy717 Well I get most of mine in the evening but TLDR is the only non American channel (That uploads consistently) I have notifications for.
3 pm in Indonesia
Still 4am on the east coast 😂☠️
Well, they could wait 5hrs more no problem. Then most folks would be awake.
Confused Europeans looking at China: "Wait... You are in a crisis because your home prices are *falling* ?????"
What a terrible thing to happend... Houses should be more afordable for everyone.
When a large percentage of the population save up everything they can, and then invest in real estate, because the stock market is too volatile, and then the real estate market collapses with they life savings, it's a reason to worry...
The thing is lots of People already have a house I china. House were to speculate not to live in... 🎉@@andresgarciacastro1783
More than confused... I would say ignorant 😂😂😂
And wait for it. Wages are still growing at 5% a year... with nearly 0% inflation.
Truely the west is Orwellian
It's definitely alarming to hear about a default cycle, especially in the context of the housing market. Defaults can lead to foreclosures, and that has a cascading effect on the overall real estate landscape.
While it's concerning, it's important to look at the broader economic context. A default cycle doesn't necessarily mean the housing market is completely finished; it might signal challenges, but markets are dynamic, and they can recover.
But if more people are defaulting on their mortgages, doesn't that mean home values could plummet?
Yes, that's a possibility. An increase in foreclosures can lead to an oversupply of homes in the market, putting downward pressure on prices. It's the basic principle of supply and demand.
How can people address concerns about their property values?❤❤❤
Now might be an ideal moment to reevaluate your financial status. If you're worried about your home's value, consulting a real estate professional or financial advisor could be beneficial.
If you are not in the financial market right now, you are making a huge mistake. I understand that it could be due to ignorance, but if you want to make your money work for you...prevent inflation
How can I get in touch with Maria Williams ? What are her offerings?
Oh great I'm interested then, will reach out to her now. thanks a lot
Best signal provider in the market.
Knowledgeable, level headed (no loss like some other traders who recently jumped on the bandwagon).
She’s very active on whats-apk
+1365
Your interpretation of the house price change chart was wrong. Any period where the change is above zero, prices are still growing, so it's only been falling in the negative region, or a little longer if you break apart the yoy number into mom numbers
inflation
@@justanaverageguy912 China has deflation ATM
Notice that the Chinese government isn't bailing out these developers
That's bad news for everybody , Local economies Builders , Contractors Workers , banks No government Bail out banks will go belly up They are on the hook for those loans Who's gonna pay?
This is all in the government's plans. They told all investments this was coming more than five years ago. Now that it is here, every "expert" is surprised.
They will not bail out these companies, and by extension, investors. This is unlike other countries where taxpayers foot the bill for bad decisions and greed of big multinational companies.
@@tonymills5086 it really isn't tho
oh no cheap property, its so much better having your population on the streets.
LOL imagine, having an affordable housing/real estate is a "crisis" 😂
This doesn't seem like a Chinese problem. Although the housing prices are high, the rent is much more reasonable and lower. So the main concern is not people don't have a place to live but that their investment in the houses crash, which may put them in huge debt. (Many ordinary people invested in housing as well, not just rich speculators)
In generale cheap houses are good (corrently looking for One 😭)
But if i Just payed a lot for my house, and it's price don't cover the morgage anymore, of things go to shit in my Life I'm royally fucked 👑😅
western economists be like.
@@97Corvi if things went to crap you wouldn't be able to pay back the small interest anyway and you would go bankrupt anyway.
The core of the problem that caused the crisis is not goeing away... Mind you, you can easily find cheaper houses in downtown Tokyo, than in third tier regional cities that no one has ever heard of.
Add to that the fact, that you don't actually own property in China you own a lease, or more precisely whatever is left of the initial 70 year lease granted to the developer. Meaning, by the time you retire, your "property" is all but worthless, and there's nothing left for your kid to inherit. And that still doesn't take into account the poor quality of the building. There'll be deep cracks within a year or two, and it's turning into a deathtrap after a decade.
The problem is of course, that there is nothing else for Chinese people to invest into. Banks are not trustworthy, they'll just take your money away. You can't have too much cash, or the police will take it away. Stocks are too volatile in China. Foreign investments all but unobtainable for 99% of the people. What remains, is the domestic housing market. Thus everyone "invests" into that.
Can you elaborate? This sounds very interesting & like a potential TLDR News video in the future. What's the "lease" system like? And how come banks can take your $ away in China? Why are stocks so volatile & foreign investment so unobtainable?
@@markjerue9734 The answer for all of those questions is simple: "The CCP"
This is literaly not true, you can invest in the stock market, and the government is pushing for it instead of "investing" in housing.
@@markjerue9734the CCP has never swayed from Communism. Imagine how funny it sound to ask the same questions about the matters in the USSR😂
Absolutely incorrect! For individuals, property rights to a house consist of two systems: one is land ownership, which is state-owned, and the lease term for the land is 70 years. After 70 years, the state may make subsequent arrangements for the land according to the needs of urban planning; the other is the personal property rights to the house, which are lifelong. Suppose a scenario where, after the 70 years are up, if the government has new plans for your land, then the government needs to requisition the land and provide each user with compensation for demolition and new housing. These compensations are often much higher than the value of the original house. Many families in China have become wealthy through demolition. If, after 70 years, the government has no new arrangements for your land, you can continue to renew the lease by paying a small amount of renewal fee. The content you mentioned is full of errors and misguidance, and is not worth refuting at all.
falling rent and house prices are a good thing actually
If it's happen here in Singapore it's good cost is really expensive to rent one.
Its only bad for people that have invested into real estate.
Not if your pension and life savings are tied to the housing market.
What about falling salaries and censored levels of unemployment?
The rent is always low in China. The problem is not on population, but the local government who cannot sell lands anymore, when government profits from selling the house. You know who ll impact the most
Housing prices going down is good actually. *If more people afford shelter.
Not if you've invested your savings in the value of your house going up.
@@alucardwhitehair If you treat housing like an investment you have to be ready to take a risk that housing prices can also go down.
@@alucardwhitehairthats how we get housing crisis.
@@TheInnapropriate Tell me you don't know anything about the Chinese investment environment without saying so.
@@TheInnapropriate Yeah I know, my sentiment is in line with that fact.
The economic crisis is really worrying, especially with everything going on in the global economy.
the current economic instability is causing a lot of concern. With factors like trade tensions and fluctuating markets, it's hard to predict what's coming next.
That's true. And the ripple effects of these disruptions are felt worldwide. It's not just one country's problem; it affects everyone.
The massive government stimulus packages implemented to combat the pandemic's economic impact could have long-term consequences, like inflation.
Inflation is definitely a concern. It can erode people's purchasing power and make it harder for businesses to operate profitably.
it's crucial to stay informed and be proactive in managing our finances during these uncertain times. Seeking advice from financial experts can really make a difference.
The only reason this can be called a problem, is because housing is still being treated as an investment rather than a necessity. People have to have a place to live. That shouldn't be seen as "wealth" unless the property surpasses needs and becomes excessive. (Ex. Second properties, mansions, multi-acre unutilized lots, landlording...)
Houses are to live in, not for greedy corporations to speculate. This is why most American cannot afford a decent home.
If they had let citizens invest their money in other ways the problem would never have gotten this big. They prioritizes power over stable economics.
Pretty much everywhere in the world is having a housing crisis atm, it´s not just a Chinese problem.
@@MinimmalmythicistTrue but china has a much bigger problem than other countries
You prioritize chunky old ppl doing housing manipulation to make money over young ppl lol
Oh, they did, everyone could invest how they saw fit. Problem is they all jumped to real estate and bubbles are self-perpetuating. The more people jump in, the more prices raise and the better returns get. You can only avert this by making hoarding houses unprofitable, but guess who's not getting reelected and even possibly getting killed if they tried?
@@dive_bomb3r no, the problem is bigger than that. The chinese stock market is pretty much perpetually flat. Government controls of business and lending make investing in other things much less useful. So basically all families in china try to invest in real estate because it was the only thing you could invest in that would be relatively safe and actually make money. The government inadvertently made housing the only decent investment strategy in the country.
My outlook on money changed when I realized someone making $200K can retire broke & someone making $80K can retire a millionaire. With the current market movement, you have $100K to invest. Where are you investing it?
I operate a wide- range of Investments with help from My Financial Adviser. My advice is to get a professional who will help you, plan and enhance your management skills. For the record, working with Abby Joseph Cohen Services, has been an amazing experience.
I know this lady you just mentioned. Abby Joseph Cohen Services is a portfolio manager and investment advisor. She gained recognition as a former employee at Goldman Sachs; a renowned investor she is. Abby Joseph Cohen has demonstrated expertise in investment strategies and has been involved in managing portfolios and providing guidance to clients..
how exactly can she help? and how can I reach her?
Well her name is 'ABBY JOSEPH COHEN SERVICES'. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment..
I went from no money to lnvest with to busting my A** off on Uber eats for four months to raise about $20k to start trading with Abby Joseph Cohen. I am at $128k right now and LOVING that you have to bring this up here.
You can’t softly park a meteorite. This will be messy.
They wont let it crash they will re inflate the bubble by de vauling the yuan
Precisely, thank you.
or you can just move on from construction as being the major driver for the economy like what china is Actually trying to do, and it seems to be working too.
There's an untapped market for a Skillshare course on how to fix a housing crisis. I reckon it'd sell well in many parts of the world.
a course on how to cross a border in the dark will do much better
@@Sir_Godz My swimming lessons at the Rio Grande are always booked!
The down payment for most first properties is 30% and here in Shanghai it is 35%. Compare this to the 20% (suggested) and 10% or less (in reality) down payments in the US, and the "under water" phenomenon is still much less prevalent than in Great Recession. The Chinese simply start with more equity and it takes a much steeper decline to have negative equity.
True but we also gotta remember these homes are build like tofu so their value goes down way faster due to their poor quality
@@truechaosmulala3831is tofu worse than cardboard?
Oi, what are you doing on RUclips, bruv? Shouldn’t you be on Youku?
@lif6737 to learn (master) the local language (Chinese) is my handle because that was my goal when I was working in Taiwan so many years ago. Maybe I should update to a new goal like retirerich or something, but I have just stuck with my original. YouKu sucks and I think every expat has at least one VPN so we can be connected to the rest of the world.
@truechaosmulala3831 The houses built in the 90s and early 2000s were especially questionable. My Shanghai apartment was built in 2009 and it definitely is showing its age already.
Oh noooooo, not falling house prices. How could treating housing, a basic human necessity, as a commodity go wrong. Anglo countries and their housing bubbles should burst.
that would cause a massive recessions and countless bankrupt, homeless people. It would be a catastrophe.
@ThatGuy-bz2in The eventual consequences of constantly keeping housing bubbles inflated in western countries is still homelessness and poverty, just kicking the can down the road
Are you refering to china as an anglo country?
You might believe shelter to be a basic human necessity, but homes and property have intrinsic value which naturally leads them to be exchanged in markets, as you would anything that has value like a watch or a bar of gold.
You might think an alternative would be better but I promise you it would be much worse.
One such alternative would be public housing. Please RUclips a video on the "tragedy of the Commons" to see why that is a terrible idea at scale.
Housing prices are cyclical and when prices seem unaffordable rest assured, in time they will correct to be more affordable before becoming unaffordable again and so on.
Thats short term, long term tho, not good.
There's missing information with these videos. Consult the China videos by PolyMatter, say how regional governments get money, why there's ghost cities, and so forth. When owning apartments become the most stable investment, you get this outcome.
look people can argue over how "communist" the PRC really is, but i think most of us can agree that a mortgage crisis is a very capitalist problem to have
China is communist politically and economically capitalist ...
Investors buying property and driving up prices to where people who want to just live in them can't afford them... hmmm, sounds familiar from somewhere
The one child policy of the CCP is a problem that capitalist economies did not have
They are having this problem because they are more capitalist than communist.
Last quarter, I hit the $100,000 mark, which was exciting but unremarkable. You continue to work, save, and make wise decisions despite the uncertain economic climate. Nevertheless, my portfolio has seen a significant fall in spite of market increases. My goal is to enhance it and optimize the yield.
In their portfolios, everyone needs a margin of safety. It's not possible for me to give specific guidance, but speaking with a fiduciary advisor is essential for sensible portfolio restructuring.
While maintaining the balance of your portfolio allocations, de-risk your investments, protect your core holdings, and realize some profits. During my 11 years of investing, 5 of which were spent working with a financial advisor, I have made nearly $2 million in return, which is a 10x return on my own efforts. Best I've done thus far.
I'm glad I came across this conversation. Recently, my portfolio hasn't performed well, thus I believe I need a financial counselor. The person assisting you may be reached in what way?
*Leah* *Foster* *Alderman* is her name. Generally acknowledged as one of the best portfolio managers in the industry. Simply look up the name. You would locate the information you needed to schedule an appointment.
this is a pretty basic explanation of the problem. it goes far far further than this
If you ever want to spot propaganda, you'll see a blend of some true facts about the issue at hand sprinkled with some significant misinformation and exaggerations about the issue. This is what I have seen with this channel. But at least they are consistent. Consistently wrong about China's economy. Go back and look at last year's video about what they said about "the collapse of China". I give them a B+ on the effort though.
Crisis for some, a blessing for others who need cheaper housing.
That's the nature of bubbles, they burst
That's why USA bubble burst and China is still rising
So u agree usa is a bubble
5:23 That's not China, that's Chinatown in San Francisco
Falling price is a actually good
it is not.
@@ThatGuy-bz2in yes it is
@@RedBird7 no, it is financially ruinous. Home ownership levels vary by country. In china 90% of people own a home. In the US 66% of people own a home. In ireland, 70% of people own a home. They spent hundreds of thousands, or millions on their home. If their home suddenly lost a large amount of value, that would be a huge hit to their finances. you would financially ruin millions of people. People counting on that money in retirement would be forced to work until they die. The economic consequences of that kind of policy would be disastrous. So yay... a house is cheaper for you to buy. But since you will probably end up unemployed in the aftermath of the recession it causes, it wouldn't help you anyway.
Frankly I get this take, but it's just wrong in this case.
@@ThatGuy-bz2in but why? You live in that house. You'll not sell it either way. And why would you end up unemployed? A house doesn't pay salaries, a job where you work for someone making a product does. Only housing employers would lose jobs not everyone. Why is the house your retirement? It won't pay you a pension. Do you want to sell it when you retire? Where will you live then? And if you do, don't you need a cheaper home at that point?
I have been thinking more deeply about the housing issue and none of it makes sense to me. Something which adds no value to anyone beyond residents of a house is being speculated upon. A house doesn't produce anything beyond a living space, yet its value is multiple times that.
Unaffordable housing is a bad thing. Reversion to the mean is a good thing. CCP should do nothing. Greed must be punished once in a while. Prudence must be rewarded. Those that stayed away from the housing bubble is still waiting for prices to drop.
the problem is that it punishes the population of the country. Most chinese people have their entire life savings in real estate. Prices crashing means their life savings are gone. Then you have riots, destruction, death.
@ThatGuy-bz2in The prudent with life savings in cash, stocks or gold are waiting to buy at reasonable prices. Spare a thought for those that waited a lifetime for this moment while their peers were living it up by being foolish. The only help the CCP should give is to first time buyers. Otherwise, they end up encouraging the bailout culture of the west, where greed is rewarded and never punished.
@@beerharmien in china, there are no stocks. leaving your life savings in cash to be eaten away by inflation is stupid. And gold, while a useful store of value, is a stupid investment.
In china, property was the only investment option. It's been that way for decades. 90% of the country owns a home for this reason.
@@ThatGuy-bz2in I disagree with the stock argument. There are a few stock markets in China, Shanghai Stock Exchange being the biggest. And the Chinese apps makes buying stocks very easy including US Stocks. But investing in stocks require research, people are just lazy to educate themselves.
Chinese people has an illusion that property prices can only go up. The real estate market also has a lot of people eager to please. It’s an easy and ‘brainpower lazy’ way to invest.
One only actually get into trouble if using debt. Storing value is only a thing if the cash is already there. Borrowing to purchase something is gambling, even if it’s property.
@@beerharmien look at the price of china's stocks over the last few decades. Then compare that to the price change in property. Investing in chinese stocks is laughably stupid. No one does it in china because there is almost no return on investment. Also, because the chinese government can decide one day that they don't like a company, or an entire industry, and if you are invested in them, you are ruined. Property is much safer (historically).
Hong Kong stock exchange's Hang Seng Index actually increased about 20 ~25% from its lowest point this year. The housing sector is not dragging it down its economy that much anymore, as the China's 1st and 2nd largest housing developers stock got delisted from the Hang Seng Index.
The same rising trend can be found in the Shanghai stock exchange's SSE composite index.
Lots of countries need falling property prices, even if they hurt on the short/medium term.
I wish prices in the UK would do that
the government certainly won't be trying to make that happen. 50% of british people own a home. Which means that trying to drive down housing prices is actively trying to screw over 50% of british people. And since that 50% tends to be older, they are the ones that actually show up to vote. So no politician in his right mind would do that.
The high housing prices in China are NOT a result of rapid urbanization. China is experiencing a speculative bubble. People got badly burned in the stock markets and decided that the only safe investment was real estate. This has created a bubble the size never previously seen, and the ongoing pop is not going to be pretty.
I mean we gonna sit here and act like the US doesnt have the same issues? 3k for a 800 sq ft apartment in a area with income average of 40k
no, no they do not. In the US prices are high because of high demand and low volume. In china prices are high because that is the only asset most chinese people are able to invest in. In the US, alot of people have retirement savings accounts that are invested in stocks or bonds. In china, it's practically all real estate.
@@ThatGuy-bz2in
In many countries owning houses can get you a lot of tax benefits
Especially if you buy it with debt
Which attracts major businesses
My father avoided paying hundreds of thousands of dollars worth of taxes by buying property with debt
@@ProudTurkroach ok. but only a tiny fraction of homes are owned by big businesses. They are certainly a factor, but far from the biggest factor.
Housing Prices are too high: "It's a Crisis"
Housing Prices start falling: "Oh no, it's a Crisis"
Please someone make modern life make sense.
Things are very very complicated and looking at one facet doesn't usually tell the full story.
Humans as a species don't like that though, and that leads to people flocking to leaders who blame everything on one concrete scapegoat
@@iambicpentakill971
Housing in USA unaffordable
Belst thing to blame china
The CCP should've invested more in honey.
Pooh Bear ate it all, judging by his waistline.
Awww u gonna cry on your made in china phone
@@guydreamr white boi jealous on his made in china phone
@@JonySmith-bb4gx u are correct
Like we invest in homelessness in usa ?
4:24 "... prices have fallen consistently for nearly 3 years..."
Need to get your vision checked, mate. Your own chart clearly shows 5 years of price declines (since 2019).
Nope, you've misread the graph, and they've not helped with their big sloping arrow. Everything above the line is price growth. Only when it goes below the line do prices fall. So housing prices have been declining for only 2 years.
I wish we have a property price drop issue here in Sydney :(
That would be terrible for the economy…
@@casper6014 The economy is already dying. Most people can’t spend because too much of their income is tied to home loan repayments.
@@ktakeshi17 That doesnt mean the economy is dying, its actually the opposite. Small economies have cheaper housing but worse income, big economies have high housing prices and high incomes.
@@casper6014 The reserve bank kept the cash rate unchanged because they know the economy is cooling down, and raising it will make it worse.
The forever rising housing market is making it impossible for young people to buy a property.
While it is good for developers and large land owners, it's definitely worse for normal people.
So essentially like inflation, prices up is good but too much up is bad and down is horrible.
pretty much. A house is part a place to live, and part an investment. Alot of people count on that investment to pay off, like selling your house when you retire kind of thing. If you make the value of people's investment go down, you financially ruin them. Then they get angry...
Why is housing becoming more affordable a crisis? Also comparing the median income of a developing country with 1 billion people, half of whom live in rural areas, to the rental price of megacities 3x the size of London, and then comparing that to the rental price of London relative to the median income of the UK, a developed country with a tiny fraction of the population and a much higher cost of living, is nonsensical and misleading. Why not compare the median income of people actually living in these cities?
hmm, why is the destruction of the life savings of the majority of the population a crisis? If you need me to answer that for you, you might not be very bright.
It's bad for a lot of reasons in China right now. One of the biggest problems is that really big developers can't finish the apartments that they've already sold. This will potentially spread to banks and citizens will lose their savings.
@@matsmcmats why are they not able to finish them if they've sold them? How is that related to housing prices? If they are being sold before they are even constructed, then demand must be exceeding supply which would drive prices up. Why would incomplete construction 'spread to banks'?
@@MediaMushroom because the developers are heavily indebted. If they go bust then the banks might have a problem. Look up Country garden and Evergrande. Housing prices plummet probably because of oversupply and people suddenly being careful because of perceived instabilities. Speculation led a lot of people to get an extra home as an investment.
China prices are not high. Hong Kong prices should be falling even faster.
Is this another "CHINA IS SO DONE FOR" nothing burger I can ignore, or is there an actual problem this time?
Its an update, things are getting worse
It's been a problem for a long time; we've known about Chinese over-investment into the housing sector for over a decade. It's probably not going to be a dramatic sudden collapse like those clickbait videos, but it could mean a long economic stagnation (e.g the continuation of what's been happening for the last 2 years or so), and it there will likely be significant political consequences, both domestically and internationally, if China's growth machine starts slowing down.
You really think China is doing just fine?
Countries don't collapse overnight. The disintegration of the Soviet Union happened over several years. China may or may not actually collapse, but it's certainly going through a long term, multifaceted crisis.
@@user-pn4py6vr4nlike the United States of America. We have crisis in every sector getting worse and worse for the past 20 years. China will be just fine
One thing I don't understand. We have heard for years about China's ghost cities. Cities full of unused apartments that people bought a second third homes for investment. How can you simultaneously have this and a housing crisis? Are there people are just not selling 2nd and 3rd homes for any price
Thanks for the video
for a very long time I've been hearing about the Chinese housing bubble but it hasn't popped yet
This is where thinking you are to big to fail kicks your own ass
Along with "This time is different". Voted way up!
Crisis? ?? YOU MEAN MIRACLE! HOUSING has been unaffordable to my hometown for years, so many of us could never hope to own one and now houses are going as cheap as 3k usd for purchase. Young people can finally own a home! I hope it continues! Many young adults happy! Old ones not so much!
No, I don't see it. More affordable housing for individual citizens is a good thing, I couldn't give a rats ass about people making everything more expensive for everyone so that they can get rich gambling on housing, it should be easier for people to not be homeless. Housing should be a right not a privilege, nor a gambling chip.
There is no housing to be had. There are thousands upon thousands of shells of skyscrapers, even tons of completely uninhabited shells of cities with entirely unfinished interiors made of tofu dredge construction and the companies that were making them don't have the money to finish anything now.
@@JathraDH "There is no housing to be had". You are saying there are no house in the whole of China?
Yes, there might be thousands of shells and tofu dredge. But for that to equal no houses is a bit of a stretch. If that were the case why would the price be falling? If there were no houses wouldn't the prices be rising?
@@miket591 The prices are falling because houses = stocks in china. People are realizing the houses they invested in are never going to be completed/usable and are trying to exit out of the situation. Even if they can't other people realize what's happening and aren't investing into the system any more.
There are plenty of existing houses sure but those aren't the problem and probably not many are being sold as they would still have value. It's the new unfinished construction that would be what is available for sale and no one wants that.
you fail to understand basic economic principles here. 90% of chinese people own a home. So if the value of homes goes down, you are talking about the life savings of 90% of the population falling. That is catastrophic.
@@ThatGuy-bz2in You can not buy groceries with a home, it is not a liquid asset. And unless the savings involve selling your home to be homeless, the value of the home is not in the price that the market gives to it, but the fact that you can live in them.
So cheap housing is a bad thing now? Houses are homes not investments.
It's a bad thing when it was an investment and the value of these homes represents the sole remaining retirement plan.
To say nothing of the wasted resources building them.
Resources that could have been put into something of actual value.
It seems that they are taking some measures to solve it, and I don´t think it´s as fatal for China if there is a recession as people claim. It certainly doesn´t mean the end of the rise of China, the USA during its rise to power faced economic calamities that were far greater, i.e the American civil war, the 1st great depession, the 1919 post-war recession, the Great depression in the 30s.
Nearly every economist now says their economy will never overtake the US in nominal GDP, their population is shrinking and US economy is 10 trillion USD larger than their economy
the chinese have lost their chance to overtake the US. Their method of doing so was using their large population of young people to turn china into a giant factory. But those days are gone. Their population is shrinking. their large population of young people have turned into a large population of old people, with not nearly enough young people to replace them due to the 1 child policy. While their economy as a whole will continue to grow, the speed of that growth is going to keep slowing. and the recession they are having due to their property crisis will slow them down alot.
Hi, just a small thing that is sometimes driving me crazy - the "TLDR News" neon* (led) sign in the background flickers, sometimes a lot. If there's a driver for the LEDs (a small box between the wall plug & the wires going to the sign), then replacing it with a suitable one would fix it, but it most likely isn't build to be user replaceable.
China is finally experiencing what we went through back in 2008. It will be painful for them, hopefully they can save most of their banks that are worth saving.
What they go through will make 2008 look like a pleasant walk in the park in springtime.
@@Ealsante My and my partner lost our jobs during the 08 Crisis, had to move with my family to a friends house who wasn't much bigger than 2 rooms. We literally lived in a camp for months.
Is that a pleasant walk in the park for you?
@@OjoRojo40 Contrast: I barely noticed there was a crisis. The GFC was something that was going on in the media, not my real life. I literally _did not notice._ While you may have experienced some rough times, on the whole, it could have been far worse.
It's way worse than that. The government would default
@@fromfareast3070 How can the government default when they have the money printing machine?
The only problem is this shows how bad things are at our own home plus they dont inflation which increases home prices either.
Population decline……duh……
Prove our
The market needs to lose about 75% of it's value. Imagine everybody's wealth is locked up in there, because there is no alternative. This means hell for decades to come.
the idea you can get rich by just sitting on an asset is an insult to the working class. Speculators can take a haircut.
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This is great news, people should have access to affordable
Property and not be subject to speculation. As usual TLDR just parrot mainstream nonsense.
For real, imagine saying that houses becoming more affordable is a crisis lmao
First
I'm sure you're aware, but I just wanted to point out the rolling shutter that the neon sign is producing. I don't think that was present on previous videos. Otherwise, great content once again!
People miss that the speculative bubble exists elsewhere as well. Here in the US, investment firms have been buying up large numbers of homes and either turning them into rental properties or simply keeping them off the market while supply problems continue and the housing prices rise. If all of these homes come back on the market in a period where investors decide they need cash, the surge of supply will crash prices.
After china aggresively attacked phillipines ,i've been losing every bit of my humanity
If housing prices were very high, isn't it a good thing long term if the prices drop?
Buying housing as investment, instead of housing, should be banned everywhere. Nothing justifies it when homelessness exists, and just seems like a waste of resources.
90% of chinese people own homes. That is basically the only investment vehicle for chinese families. They don't/can't buy other kinds of investment. They all invest in real estate. and that is where the life savings of like 90% of the population are.
@@ThatGuy-bz2in Well that doesn't seem like a good system.
@@coolbanana165 agreed. China's management of their economy and restrictions on investments in the last 50 years made property the only viable investment for most people. But allowing other types of investments might have had other effects that to a totalitarian government would have been worse. like people having an expectation of having a say.
4:24 The arrow in combination with the term "have been falling" wrongly suggests that they are falling since the peak in 2019, while they actually only have been falling for the last 2-3 years.
Man, I could sure go for a deflationary crisis right about now....
Will you be covering whats happening in Kenya? I've been seeing there's protests in Kenya against a controversial finance bill & I'm curious on your take
This is not a crisis, this is a good thing. An economy built around a housing bubble must burst and be rebuilt around productive industry.
Things like that happen. Let's remember the unification of East and West Germany. "Blossoming landscapes" were promised. The German state pumped a lot of money into East Germany. Construction took place, renovations were carried out and real estate was sold as investments, with guaranteed subsidies for 10 years. The subsidies were intended to fill the gap between the rent levels in West German metropolises and East German metropolises.
Around 2005, state subsidies ran out. The result was private bankruptcies and many apartments at spot prices on the real estate market. At that time, you could buy 10-year-old new-build or completely renovated apartments for half or less of the original purchase price. The rents at the time were so low that many property owners who had bought a property as a retirement plan could not keep it.
These are the principles of capitalism. And: In every crisis there are opportunities. Anyone who bought property in Leipzig and Dresden at reasonable prices between 2005 and 2007 is now enjoying high increases in value and increased rents.
In less then 10 y you be able to buy them under 30k ea Declining population and huge over supply with poor building quality ...basicly use 1s throw away building.
in the US just today there were Government backed second mortgages introduced. This way homeowners can tap into their equity and keep buying stuff even without jobs. it's the kind of innovative thinking sorely needed in China.
Knowing the scale of lots of real-state developments in China, it is not hard to understand the prices keep dropping despite government subsidies. Imagine blocks of brand new high rises, buying one apartment in a building/neighborhood that is likely to remain empty is stupid. Think of all factors and consequences of that for living and the apartment you bought.
dispite crisis is still getting worse, the property price of Beijing and Shanghai is still more expensive than most of the 1st world country.
Imagine putting a huge down payment on a property that (1) hasn't been built, (2) is unlikely to get built, and, if it is built, (3) will be tofu dregs. Lovely.
Read somewhere that China real estate market has 60 million unsold houses/units. Attempting to sell some as "social housing" but investors not interested.
Why is this surprising? At peak of Property market in China, property development and associated industries (construction, building supply chain, etc), accounted for 28% of total GDP, a figure that is unmatched in any of the top 20 GDPs . The US sub prime mortage crisis took almost 5-6 years to subside, it will take China as long if not longer. Any govt would have trouble turning around an industry segment that accounted for almost 30% of GDP.
Why would you buy that isn't built and you still have to pay the mortgage ....
"Home price" in China does not differentiate between "habitable" & "hollow" homes.
I love how half the countries in the world have some of the most expensive housing in the world
4:08 Another side of this is that it's difficult commoners to own stocks so property is one of the few ways they can invest in there future
TLDR: PROPERTY CRISIS!
Me: Housing is more unaffordable than ever?
TLDR: Housing prices are falling!
Me: Oh... No?
So the upshot is people's savings are already tied up with finished/unfinished homes and people have no more savings for new homes, so prices are falling?
There are many things to admire about Slavic countries these days but most of them are long-term oriented. They don’t implement policies that benefit the country for a short time and than lead to crisis or collapse.
Dude, UK home ownership rate 50%, China home ownership rate 90%. 36% UK wealth is in housing because half of them don't have one.
There’s no way the housing market will rebound when unemployment remains high, business confidence is at a low and retail sales, industrial production and consumer confidence are all underperforming. China’s housing market still has at least a few years of hardship
If house become cheaper you should buy it ASAP. 😅
A guy I knew lives in Shanghai. He bought an apartment in 2019 for $1.8M while his salary was only $40k(way higher than the average salary in China).
ok. so he lost it all.
The broad economic rescue RMB will only go to the developers and their owners, which will then inflated prices in places like Australia, USA and London!
I pray for the day homes become a human right and not an asset solving homelessness throughout the world.
@ChinchillaBONK A home is your right when you pay for it. Why do you expect other people (tax payers, aka "the government") to fund your lifestyle?
Could there be lesson in here for all other countries? Using housing as investment rather than a necessity and creating bubbles? It only seems to have gotten worse since the Air BnB investment thing started.
I have heard housing prices there will fall 50%. Maybe. That would still make it the most expensive in the world.
6:43 "Risk intruducing a moral hazard" 😂😂. If you think the CCP has any concern about morality whatsoever, you dont know what your talking about.
1:25 The hukou system was not really explained here.
But it’s basically an ID card that links citizens to a specific region of China. You could live in Shanghai for 15 years, but the government doesn’t consider you “Shanghainese” unless you have the right hukou. How they work is slightly different for each region, but some basic things (like sending a child to school) are linked to having a hukou in that region. Virtually noone who lives in Shanghai is considered to be “Shanghainese”, for example.
Buying a house in a region of China will (usually) give you an opportunity to get a hukou for that region. However, there may be rules that make buying a house in another region more inconvenient than in your own hukou region.
The closest British example I know is how Scottish people can go to Uni for free. So the government has an official definition of “being Scottish” and can deny other Brits opportunities if they don’t fulfil that criteria. That could (theoretically) affect house prices in Scotland.