China's housing crisis deepens as Evergrande shares slide - BBC News

Shares in the Chinese property firm Evergrande have fallen as problems in the country’s struggling housing market deepen – affecting the wider economy.

Its mainland unit Hengda Real Estate has defaulted on 4bn yuan (£449m; $547m) of debt, it revealed on Monday.

The BBC’s Analysis Editor Ros Atkins examines the background to the current crisis.

#China #BBCNews

[Olivia-zc]

I believe a housing market crash is on the horizon due to many individuals buying homes above the asking price despite low interest rates. Now, as housing prices drop, these buyers are in risky situations without equity. Foreclosure seems probable if they can't afford their homes. Even selling wouldn't bring profits. This situation will likely affect many, especially with expected layoffs and the rapid rise in the cost of living.

[Rhgeyer]

It's been a rough year with losses from failed banks and government, real estate crashes, a struggling economy, and downturns in stocks and dividends. It feels like everything has been going wrong.
What a terrible year it is…

[Alejandracamacho]

Considering the current reality of global economic crisis, it is crucial for everyone to prioritize investing in diverse sources of income that are not strongly reliant on the government. This includes exploring opportunities in stocks, gold, silver, and digital currencies. Despite the challenging economic situation, it remains a favorable time to consider these investments.

[raynoldgrey]

This happened with the 2004 housing boom - home prices were greatly inflated, meaning people couldn't sell later because they owed more on the house than they could sell for. I know quite a few people who bought then, thinking they were making a good investment to sell later, but it's taken until the COVID housing boom for the prices to come back to those original amounts.

[mcgmcg]

Residential properties are not bought in the western sense. They are merely 70 year leases.

[mprest]

The Chinese economy has been a house of cards for years. People buying 2-4 houses and no one living there is insanity.

[kortyEdna]

The statement "How the Fed destroyed the housing market" is an oversimplification of the complex factors that contributed to the housing market crisis of 2008. While the Fed's policies may have played a role, it is important to consider the wider context and multiple factors that led to the crisis.

[Diegohe]

In light of the impending recession and the fact that inflation remains above the federal reserve 2% target in this time of conflicts and war, several leading market analysts have expressed their views on how dire they believe the economy will be, next recession and how far stocks may go. I need advice on what investment to make because i want to build a portfolio for my children that will be worth at least 800, 000 dollars

[johnfenechdoe]

All the Chinese Bots getting nervy and feisty here 🎉😂😂😂

[etiletsatsi]

You don't say! Surely this is the first and last time in history that disaster followed when all Chinese people decided to do one thing at once.

[techcafe]

The commodification and financialization of housing is an evil scourge on societies around the world.

[maxriley]

The real lesson here is that trying to fund nearly the entirety of government spending with speculative land banking is not a sustainable taxation model when you hit the middle Income trap.

[mrbyorself]

I spent a decade in China and told my friends this was going to happen years ago, but none of them believed me. In this case, I hate being right but I wish they had listened.

[MathVdb]

Greed is one of humans' main issues!

[DKonigsbach]

Investment driven economies are unsustainable. No business can survive customers. Economic policies that focus only on ROI instead of maintaining a consumer base will invariably lead to bubbles that collapse catastrophically.

[maggotman]

Some experts believe real estate constitutes about 30 percent of Chinese GDP. The problems of developers dwarfed by the potential collapse of prices of existing homes. Chinese people collectively could lose tens of trillions. Price to income ratios of 40 to 1 in top cities making housing unaffordable and vulnerable to a draconian drop.

[Digmen]

A very good summary of the situation in China.
Now do a story on the factory and jobs situation

[Taketimeout]

This has happened in many countries. The housing bubble.
America 2008. But that was for homes, not investment.

[mrxboxone]

65 million empty homes wow that's insane

[FranFerioli]

A house is a safe investment as long as someone is able and willing to live in it. It is worthless otherwise.