A Hong Kong court ordered the liquidation of China Evergrande, the world’s most indebted property developer.

Evergrande has assets of about $245 billion, but owes about $300 billion.

Its demise is a “controlled collapse,” but still raises systemic risk and will hurt investors, says an analyst.

  • partial_accumen@lemmy.world
    link
    fedilink
    English
    arrow-up
    68
    arrow-down
    4
    ·
    edit-2
    10 months ago

    is a symptom of a deeper malaise in the Chinese real estate market.

    Its even worse than that because retail investors in China use real estate as their primary investment vehicle. Where as someone in the USA might put money in a 401k for retirement or a brokerage account for investing, those don’t exist (in the reliable way) in China. So many regular people’s nest egg is tied up in real estate. So this isn’t just the real estate market getting wiped out, its millions of working class people’s life savings just evaporated.

    • Burn_The_Right@lemmy.world
      link
      fedilink
      English
      arrow-up
      14
      ·
      10 months ago

      Goddamn. Thanks for the perspective. This is much more horrible than I thought. It sounds like vulnerable working class people are going to be hurt the worst.

    • Jaytreeman@kbin.social
      link
      fedilink
      arrow-up
      13
      arrow-down
      2
      ·
      10 months ago

      Not just a China thing. Canada is absolutely fucked with the government floundering to try and keep house prices from falling

      • partial_accumen@lemmy.world
        link
        fedilink
        English
        arrow-up
        24
        arrow-down
        1
        ·
        10 months ago

        Correct me if I’m wrong. I know that Canadian home prices are bonkers, especially in large cities like Vancouver or anywhere in the GTA (are the Quebecois also having this trouble?). However, the problem with Evergrande isn’t just failure of this company reduces home prices (which is where lots of Canadian savings resides), but Evergrande had taken deposits for tens of thousands of homes it never built or never completed.

        So while the value/sale price of a home in Canada may be falling. At the end of the day it still does have value monetarily, and still serves a vital function of housing a family.

        China’s situation with Evergrande means the money paid for the house by the owner simply evaporated with no possibility of a refund and the house doesn’t exist because it was never built (or never completed). So to me the China situation looks significantly more dire.

          • Croquette@sh.itjust.works
            link
            fedilink
            English
            arrow-up
            5
            ·
            10 months ago

            It’s mental. A rundown shoebox in my neighborhood is upward of 600k even with interest rates as they are now.

            We are holding on our apartment as long as possible, wishing that we don’t have to move until kindergarten is done for our youngest. The moment we are forced to move, it will cost us easily 1k$/month more for a lot less space.

        • Sagifurius@lemm.ee
          link
          fedilink
          English
          arrow-up
          3
          arrow-down
          1
          ·
          10 months ago

          Nah, they way things are, if the canadian housing market falls, the whole economy will shit the bed. The GDP is currently driven by the housing market, the nations finances are literally built on a house of cards.