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Post by glennkoks on Feb 12, 2024 21:58:19 GMT
I don’t think the total number of empty homes is a useful indicator of how long it will take for China to work their way out of the housing bubble.
An employee in China receives a paycheck with deductions much like the US. But around the year 2000, there was an additional deduction, the specifics of which varies by geographical area, which is called a housing account. Both the employer and employee are required to contribute.
The money in this account, like an IRA, cannot be withdrawn prior to retirement except for specific purposes. In this case you can only withdraw to invest in housing.
The intent was to help (incentivize) people to buy their own home. This created a huge demand for houses. Now over 90% of Chinese own their own homes compared to 65% in the US.
But this also created a huge bubble which you are well aware of, bigger than the US sub-prime bubble. People bought more than 1 house (condo) on speculation rather than leave the money in their account unusable for other purposes until years in the future.
This led to an enormous level of now-empty sub-standard homes. Dirt floors, no-central heating, no place for appliances, was typical of homes built in the 1980’s. These homes will never be lived in again. New homes have been built which are below the standards people are now looking for and can afford and these newer, never lived in, low quality houses sit empty. A significant portion of the empty housing is undesired housing.
For most of the population in the U.S. homes are privately owned, they have value and are good investments. A price to income ratio averaging from 0.5:1 to about 3:1. In China the land is all owned by the government and is leased to the public. The price to income ratio is a shocking 20:1 - 35:1. Which brings us to the topic of mal-linvestment. What is a home in China worth? Is it finished and desirable? Do the majority of the 90% in China that "own" homes have any equity at all? Because if these "homes" have really lost as much value as many believe it is safe to say that the Chinese people have squandered somewhere between 20 and 35 years of their annual income. There is no way no how I could squander 35 years of my current salary away and still expect to have any type of quality of life that I currently enjoy. In Japan's real estate bubble that peaked in 1989 and crashed during the "Lost Decade" real estate values dropped by as much as 70% and to this day have not reached pre crash price levels. The Chinese bubble is infinitely bigger... seekingalpha.com/article/2830656-the-chinese-housing-markets-outrageous-price-to-income-ratio |
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Post by Sigurdur on Feb 12, 2024 22:10:50 GMT
If you live in a State which has property taxes, you never "own" your home. It is rented from the Government.
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Post by nonentropic on Feb 12, 2024 23:40:11 GMT
Lost savings much like tax which is mostly wasted by Govt.
So the people have lost money the leveraged purchases will be bailed by the Govt. of China over a period five years but the economy is still growing. I do find it hard to believe but if it is so then inflation and growth will solve the issue in 10 years but a huge hole in the peoples faith in their leaders and China's wealth. waste of capital is waste.
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Post by glennkoks on Feb 13, 2024 0:24:29 GMT
Maybe they can plant rocks on rebar and grow their way out of this economic mess they created.
Yes they plant rocks glued to rebar in China. Seeing is believing.
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Post by duwayne on Feb 13, 2024 2:45:06 GMT
I don’t think the total number of empty homes is a useful indicator of how long it will take for China to work their way out of the housing bubble.
An employee in China receives a paycheck with deductions much like the US. But around the year 2000, there was an additional deduction, the specifics of which varies by geographical area, which is called a housing account. Both the employer and employee are required to contribute.
The money in this account, like an IRA, cannot be withdrawn prior to retirement except for specific purposes. In this case you can only withdraw to invest in housing.
The intent was to help (incentivize) people to buy their own home. This created a huge demand for houses. Now over 90% of Chinese own their own homes compared to 65% in the US.
But this also created a huge bubble which you are well aware of, bigger than the US sub-prime bubble. People bought more than 1 house (condo) on speculation rather than leave the money in their account unusable for other purposes until years in the future.
This led to an enormous level of now-empty sub-standard homes. Dirt floors, no-central heating, no place for appliances, was typical of homes built in the 1980’s. These homes will never be lived in again. New homes have been built which are below the standards people are now looking for and can afford and these newer, never lived in, low quality houses sit empty. A significant portion of the empty housing is undesired housing.
For most of the population in the U.S. homes are privately owned, they have value and are good investments. A price to income ratio averaging from 0.5:1 to about 3:1. In China the land is all owned by the government and is leased to the public. The price to income ratio is a shocking 20:1 - 35:1. Which brings us to the topic of mal-linvestment. What is a home in China worth? Is it finished and desirable? Do the majority of the 90% in China that "own" homes have any equity at all? Because if these "homes" have really lost as much value as many believe it is safe to say that the Chinese people have squandered somewhere between 20 and 35 years of their annual income. There is no way no how I could squander 35 years of my current salary away and still expect to have any type of quality of life that I currently enjoy. In Japan's real estate bubble that peaked in 1989 and crashed during the "Lost Decade" real estate values dropped by as much as 70% and to this day have not reached pre crash price levels. The Chinese bubble is infinitely bigger... seekingalpha.com/article/2830656-the-chinese-housing-markets-outrageous-price-to-income-ratio" ..housing on average accounted for about 22 percent of consumption expenditure in China, and it represented about 33 percent of household expenditure in the U.S..."
Federal Reserve Bank of St. Louis in 2018 article.
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Post by glennkoks on Feb 15, 2024 13:43:49 GMT
For most of the population in the U.S. homes are privately owned, they have value and are good investments. A price to income ratio averaging from 0.5:1 to about 3:1. In China the land is all owned by the government and is leased to the public. The price to income ratio is a shocking 20:1 - 35:1. Which brings us to the topic of mal-linvestment. What is a home in China worth? Is it finished and desirable? Do the majority of the 90% in China that "own" homes have any equity at all? Because if these "homes" have really lost as much value as many believe it is safe to say that the Chinese people have squandered somewhere between 20 and 35 years of their annual income. There is no way no how I could squander 35 years of my current salary away and still expect to have any type of quality of life that I currently enjoy. In Japan's real estate bubble that peaked in 1989 and crashed during the "Lost Decade" real estate values dropped by as much as 70% and to this day have not reached pre crash price levels. The Chinese bubble is infinitely bigger... seekingalpha.com/article/2830656-the-chinese-housing-markets-outrageous-price-to-income-ratio" ..housing on average accounted for about 22 percent of consumption expenditure in China, and it represented about 33 percent of household expenditure in the U.S..."
Federal Reserve Bank of St. Louis in 2018 article.
The difference between the two is most homes in the US are actually worth something. Homes in China in many cases are unfinished hulls worth value on paper only. |
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CHINA
Feb 15, 2024 18:14:10 GMT
Post by duwayne on Feb 15, 2024 18:14:10 GMT
" ..housing on average accounted for about 22 percent of consumption expenditure in China, and it represented about 33 percent of household expenditure in the U.S..."
Federal Reserve Bank of St. Louis in 2018 article.
The difference between the two is most homes in the US are actually worth something. Homes in China in many cases are unfinished hulls worth value on paper only. Where did you find this information? It costs less per square foot to build a home in China. Homes are smaller. I would guess the homes these days generally have value since the per capita GDP has risen so much. |
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CHINA
Feb 16, 2024 1:34:35 GMT
Post by glennkoks on Feb 16, 2024 1:34:35 GMT
The difference between the two is most homes in the US are actually worth something. Homes in China in many cases are unfinished hulls worth value on paper only. Where did you find this information? It costs less per square foot to build a home in China. Homes are smaller. I would guess the homes these days generally have value since the per capita GDP has risen so much. Considering there are somewhere between 65 and 80 million vacant homes in China they can't be worth much. Or people would be buying them. |
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CHINA
Feb 16, 2024 14:21:40 GMT
Post by duwayne on Feb 16, 2024 14:21:40 GMT
Where did you find this information? It costs less per square foot to build a home in China. Homes are smaller. I would guess the homes these days generally have value since the per capita GDP has risen so much. Considering there are somewhere between 65 and 80 million vacant homes in China they can't be worth much. Or people would be buying them. I see what you're saying my focus was on the homes people are living in. |
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Post by glennkoks on Feb 19, 2024 18:39:00 GMT
Foreign Investment dropped 82% in China going back to 1993 levels. We are witnessing an utter collapse in the Chinese economy.
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CHINA
Feb 19, 2024 22:25:56 GMT
Post by ratty on Feb 19, 2024 22:25:56 GMT
Foreign Investment dropped 82% in China going back to 1993 levels. We are witnessing an utter collapse in the Chinese economy. |
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Post by glennkoks on Feb 25, 2024 14:15:23 GMT
Chinese quality on display!
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Post by justme on Feb 29, 2024 17:35:08 GMT
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CHINA
Mar 1, 2024 12:18:57 GMT
Post by nemesis on Mar 1, 2024 12:18:57 GMT
Don't think I would want to be a window cleaner in China.
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CHINA
Mar 1, 2024 12:33:32 GMT
Post by justme on Mar 1, 2024 12:33:32 GMT
In China, they have had driverless cars, taxis, trains, and buses for several years now:
You can pay for items in stores with a wave of your hand:
......... China is corrupt and backwards.........They have no water or electricity.......Their economy is falling apart.
Keep living in your indoctrinated neocon fantasy world.
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