Why China's Crazy Housing Bubble REFUSES TO BURST!

This is getting ridiculous! Housing prices in China have now got to the insane price that an entire year's salary can only buy you 10 square feet, so on average it takes 900 years of salary to pay for a small 2 bedroom apartment in the big cities... Why? What's going on? How is it that this market hasn't exploded yet?

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[ItsTimePictures]

My ex in China lost 70% of her assets in that crash. I tried warning for for months on end and she wouldn't listen to me.

[SandmanMGTOW]

It's spilling over into Canada, Australia and the USA.

[genepozniak]

Wow! When I was an undergrad in the 80s, I wrote a short sci-fi story about a future dystopian society where the economy and jobs were almost entirely driven by just such an endless cycle of build-demolish-build; but it was based on extrapolating a future US economy, not Chinese. lol.

[BobbyGeneric]

When I was a broke flight instructor living in Phoenix in 2008, many of my coworkers were getting rich flipping houses... The market was so insane they would already have a deal lined up to sell before even closing on the purchase! When it all came crashing down, guys who were making 30k usd a year in salary were left holding MILLIONS in mortages that you couldn't sell for 50 cents on the dollar.
I didn't understand the logic in it all so I wisely stayed away.

[dfv]

"If you build it, they will buy" only applies to first/second tier cities. 3rd and less tier cities are already suffering.

[noahway]

Concrete boxes. Exactly. Most soulless architecture I have ever seen. I'd be depressed every day if lived there

[Raptor]

This explains why they are so ecstatic about buying in the US.
"What? You mean I get to keep the thing that I buy??"

[jmshwood]

Serpentza: "There is no religion in China, rather than greed!"
You're so right! As what I have experienced in dealing with many Mainland Chinese people; they're only good to you if they see they will get benefits from you.

[menguardingtheirownwallets]

You just described the real estate market in Toronto, Canada, 100%. No one invests in stocks, they all invest in condos and houses, often renting them out for less than what the mortgage costs them, all in a hope that the rise in prices will offset the losses from the mortgage payments.

[Fr.VeniceLAI]

Finally, your videocast has become so relevant today, Sept-2021, with Evergrande's huge USD300 BILLIONS liabilities and financial woes, gathering International media & investors' attention.

[non-wxqm]

I never realized the, "ownership" was really a seventy year lease from the government.

[lvdailythoughts]

I am surprised how accurate your observation and description of the current housing situation in China, as a native Chinese citizen, my two cents are China is facing a very critical and extreme difficult choice, which is to let the bubble burst OR let the housing market keep dragging down small businesses, jobs, newborns and overall consumption. My take is that the government is executing a slow steady "burst" rather than another financial crisis, but from the look of it, it may take decades to actually solves the current crisis, so to put it simply, China is facing some nasty problems that will hurt the entire population no matter what. Another great example of showing that planned economic might has some advantage in the short term, but it will bury itself because no brains can match the efficiency of a free market.

[frankxu]

When you are both the player and the referee you will never lose : )

[DawnyAussie]

Other commenters have pointed out- it was a real problem with the spillover into Australia with Chinese investors buying namely land (usually in the form of farms to assist the supply chain back to the mainland) as well as houses. There are so many ghost properties that were bought 5 or more years ago (obviously bought as long-term investments by overseas buyers) that it's ridiculous. The Australian government started to make steps towards limiting the amount foreigners could invest in real estate, but quite frankly, the damage has been done. The greed of Australia looking for a quick jab in the arm from the property market has crippled us in the long run.

[HungrylikeaWulff]

„80 square metres, the size of a living room“. Bro thats a big flat in europe aswell. *cries in european*

[MickyELee]

You are trying to give a rational explanation of madness. Well done. Impossible task.

[am-mdwl]

Sadly this is having an effect in Australia as well. Large developments with completed empty apartments. Meanwhile rents (pre Covid) were skyrocketing for older poor condition apartments while brand new apartments sit there empty. Land values are now unaffordable anywhere in a capital city as they are not bought to be a family home but rather a development opportunity.

[alanjenkins]

Paying somebody to dig a hole and another to fill it is not growth. It is though a distraction, which I assume is the whole purpose.

[jonbarad]

Seems like a similar trend in many cities. Whole world is in a bubble

[WuhanMan]

Interesting video. When I moved to Wuhan many years ago, I noticed many empty apartment buildings (i.e. no lights on ever). When I left 5 years later the same buildings were always black at night. I worked for a large building materials company and when we were defining our strategy for the future, we found out that the average lifespan of a Chinese building was only 20 years, then they would be torn down. A colleague of mine bought an apartment and I aske him what happens in X years when the building is torn down, as it can't last forever. He told me that the government would take care of him and his family and the government would build another building. I also read a few times that there are enough empty apartments to house the entire population of Germany and France. I have been waiting for a housing crash in China since 2005, but it hasn't happened yet and they seem to continue on. On a final note, a Swiss friend of mine called these apartment buildings "people silos". Your videos are great and very insightful.