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Did... Did the bubble finally burst? I can has home now?
The bubble already burst back in 2021 iirc when the company defaulted on its debt and the CPC refused to bail them out (based).
And people still talk about the “China real estate collapse” lmao
It should get more interesting with the forced liquidation now though
Haha get fucked bourgeois
This is the best summary I could come up with:
The liquidation order is likely to impact China’s financial system, even as authorities try to prevent a selloff in the Chinese stock market.
Evergrande had been granted a brief reprieve in December after it said it was attempting to “refine” a new debt restructuring plan of more than $300 billion in liabilities.
Fergus Saurin, a lawyer representing an ad hoc group of creditors, said Monday he was not surprised by the outcome.
The judge is expected to provide more reasons for the liquidation order during a separate court session Monday afternoon.
Real estate drove China’s economic boom, but developers borrowed heavily as they turned cities into forests of apartment and office towers.
That has helped to push total corporate, government and household debt to the equivalent of more than 300% of annual economic output, unusually high for a middle-income country.
The original article contains 418 words, the summary contains 140 words. Saved 67%. I'm a bot and I'm open source!
So, the real estate market in China was over leveraged just - like it's been over leveraged in many other countries. Will be interesting to see how their c̶o̶n̶ ̶a̶r̶t̶i̶s̶t̶s̶, I mean their economists attempt to correct for it. Chances are, if it's happening there it'll start a domino effect on other over leveraged real estate markets.
Hard to say. Real estate has been weird in China for years since it's one of the few investment vehicles available to the masses. A collapse domestically could even push those with the ability to do so to move more of their money into overseas real estate, which could have the opposite effect. Regardless, it's a bad sign for the Chinese economy generally, especially given that Evergrande is only the first of what's likely to be a wave of real estate industry bankruptcies.
Was just going to say this. This will just shift money away from Chinese RE, probably into RE in the West.
I think they have fairly strict monetary controls to prevent that.
I spent a decent amount of time in China before COVID and the amount of semi finished husks of buildings was alarming. They definitely over-built and the piper is finally getting paid it looks like.
Not like "many other countries" but expectedly much worse: real estate has been de facto where most Chinese have been concentrating their wealth as "investment" in the absence of better local alternatives and the inability to invest abroad.
That's a good point.
How much money, exactly, do you think is in the US property market?
How much money, specifically, from the middle class?
The important figure isn't the total, but the fraction of GDP that goes into real estate, which is disproportionate in the case of China, for the reasons I mentioned, and more (another major one being the land leased by local governments to serve as their de facto revenue stream)
this post was submitted on 29 Jan 2024
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