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65 million flats in China are vacant
- Thread starter richardyu301
- Start date
lol, do you think Nikkei was overpriced at 20,000 around 1987? Well it doubled from there before all came down. If you want me to make a prediction: I believe all markets will crash some time in the future, and I believe the world will end. When? Hmm, .............well..........
Why do you think its "READY" to burst? Any professional insight other than what you read in USA Today?
Why do you think its "READY" to burst? Any professional insight other than what you read in USA Today?
Quote from menelaus:
Why do idiots always say, "It's different in China..."
China might be different in that the gvt can cook it's books longer, the banks are more corrupt and the political situation is volatile.
But markets are markets and China is a huge bubble ready to burst, so freaking clear.
strongly disagree. Why? Because unemployment hits the masses, the poor, the untrained and uneducated. However, the real wealth that is currently built and maintained is by the middle to upper-middle class, and this class consists almost entirely of a white collar workforce in tier 1 and 2 cities. Employment in this segment is very inelastic to global demand because most of the more skilled, non-manufacturing, labor force works in domestic businesses, companies that service and serve the domestic market.
You cant look at western societies and labor markets to try to explain the Chinese market. Chinese society is cut into at least 2 segments, those who are left out, those who toil in factories or are employed in farming or sit around in government owned or sponsored "not interested in profit" entities, without the slightest prospects of promotion or further training. And then you have a white collar work force, entrepreneurs, foreign trained returnees who represent most of the wealth that is current generated. There are a number of "business men" who own to the tune of 30-40 apartments in Shanghai and struck it rich that way. Some of those never saw a university from the inside, nor are trained in anything. They may have been lucky in their timing, some used gray or outright illegal channels and relationships but nonetheless they built their wealth, something that cannot be replicated anymore compared to several years ago.
You cant look at western societies and labor markets to try to explain the Chinese market. Chinese society is cut into at least 2 segments, those who are left out, those who toil in factories or are employed in farming or sit around in government owned or sponsored "not interested in profit" entities, without the slightest prospects of promotion or further training. And then you have a white collar work force, entrepreneurs, foreign trained returnees who represent most of the wealth that is current generated. There are a number of "business men" who own to the tune of 30-40 apartments in Shanghai and struck it rich that way. Some of those never saw a university from the inside, nor are trained in anything. They may have been lucky in their timing, some used gray or outright illegal channels and relationships but nonetheless they built their wealth, something that cannot be replicated anymore compared to several years ago.
Quote from failed_trad3r:
The trigger is unemployment
Quote from asiaprop:
you clearly know nothing about the market in Shanghai or greater China, I recommend you stay in your own thread, the one nobody else ever commented in.
Let's say the average US salary is about 50k USD (which is a pretty accurate 2007 or so level). Use max half of that to make your mortgage payments and you end up with 500k equity for a home. Now, anywhere aside the great plains between the East and West coast, including all other large metropolis around the globe price new 3 bed room apartments at >500k, especially in Shanghai. Right now prices for a 3br apartment in an average location in Shanghai (such as around Xujiahu) is priced around 900k USD (around 6 million RMB).
While this segment of the market in Shanghai is clearly bubbly nobody says this must be the top. The previous post by newguy (someone who seems to know what he is talking about) puts it correctly: For local Shanghainese an own apartment is what a car is to your average country side American, a must-have. For most younger people getting married without their own four walls is almost unimaginable. Since most apartment prices are completely out of reach for those often parents chip in. I am talking of course about a growing affluent middle to upper middle class. I believe the poorest segment will soon be entirely pushed out of this city because they can simply not afford to live there anymore.
So, I would be careful to call any tops in the Shanghai real estate market. Once the bubble pops I believe we will see easily corrections to the tune of 50-60% but I claim nobody knows when this will occur.
thats why i said the trigger is unemployment.
look up china stimulus and compare it to USA stimulus. Where does the money come from?
Quote from asiaprop:
strongly disagree. Why? Because unemployment hits the masses, the poor, the untrained and uneducated. However, the real wealth that is currently built and maintained is by the middle to upper-middle class, and this class consists almost entirely of a white collar workforce in tier 1 and 2 cities. Employment in this segment is very inelastic to global demand because most of the more skilled, non-manufacturing, labor force works in domestic businesses, companies that service and serve the domestic market.
You cant look at western societies and labor markets to try to explain the Chinese market. Chinese society is cut into at least 2 segments, those who are left out, those who toil in factories or are employed in farming or sit around in government owned or sponsored "not interested in profit" entities, without the slightest prospects of promotion or further training. And then you have a white collar work force, entrepreneurs, foreign trained returnees who represent most of the wealth that is current generated. There are a number of "business men" who own to the tune of 30-40 apartments in Shanghai and struck it rich that way. Some of those never saw a university from the inside, nor are trained in anything. They may have been lucky in their timing, some used gray or outright illegal channels and relationships but nonetheless they built their wealth, something that cannot be replicated anymore compared to several years ago.
decoupling is a myth and you know it.
Where does Chinese society stand in http://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs
20 years average salary? I love Chinese statistics. How much do you really think the true average person in China earns? Let's take a convenience store worker for instance. Let's take the really high end and say around 2,500 dollars a year, and a flat will cost you a lot more than 50K, so 20 years is a pipe dream.
Not only that, but you also have to consider that the quality of the construction in China is not any where near what you get in the US, so most homes and condos tend to deteriorate very quickly. And you want to talk about low down payments and low income requirements to buy a home or condo in China? They make the US look strict a few years ago.
The banks there are in much deeper trouble, however, they just cover it all up. Also, bankruptcy is not an option there. You pay, or you go to jail. If we still had debtors prison, the crisis here would have been far smaller, but we're a free country.
Not only that, but you also have to consider that the quality of the construction in China is not any where near what you get in the US, so most homes and condos tend to deteriorate very quickly. And you want to talk about low down payments and low income requirements to buy a home or condo in China? They make the US look strict a few years ago.
The banks there are in much deeper trouble, however, they just cover it all up. Also, bankruptcy is not an option there. You pay, or you go to jail. If we still had debtors prison, the crisis here would have been far smaller, but we're a free country.