• TacoButtPlug@sh.itjust.works
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    9 months ago

    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.

    • Thrashy@lemmy.world
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      9 months ago

      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.

      • KevonLooney@lemm.ee
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        9 months ago

        Was just going to say this. This will just shift money away from Chinese RE, probably into RE in the West.

        • khannie@lemmy.world
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          9 months ago

          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.

    • u_tamtam@programming.dev
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      9 months ago

      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.

      • nekandro@lemmy.ml
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        9 months ago

        How much money, exactly, do you think is in the US property market?

        How much money, specifically, from the middle class?

        • u_tamtam@programming.dev
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          9 months ago

          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)