China's real estate reckoning

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@CameronFussner 7 ай бұрын

The fact that there is already an excessive amount of demand awaiting its absorption, despite how everyone is frightened and calling the crash, is another reason why it is less likely to occur that way. 2008 saw no one, at least not the broad public, making this forecast, as I'll explain below. The ownership rate was noted to have peaked in 2004 in the other comment. Having previously peaked in the second quarter of 2020, we are currently at the median level. Between 2008 and 2012, it dropped by 3%, and by the second quarter of 2020, it had dropped from 68 to 65.

@leojack9090 7 ай бұрын

Investing in both real estate and stocks can be prudent choices, particularly when backed by a robust trading strategy that can navigate you through prosperous periods.

@hasede-lg9hj 7 ай бұрын

You're not doing anything wrong; the problem is that you don't have the knowledge needed to succeed in a challenging market. Only highly qualified professionals who had to experience the 2008 financial crisis could hope to earn a high salary in these challenging conditions.

@lowcostfresh2266 7 ай бұрын

@@hasede-lg9hj Please pardon me, who guides you on the process of it all?

@hasede-lg9hj 7 ай бұрын

I won't pretend to know everything, though. Her name is Melissa Rose Francks but I won't say anything more. Most likely, you can find her basic information online; you are welcome to do further study.

@fadhshf 7 ай бұрын

Thanks a lot for this recommendation. I just looked her website up, and I have sent her an email. I hope she gets back to me soon.

@benevolent6705 8 ай бұрын

I visited China 6 months ago, and believe me, YES this ghost town thing is a real thing. I saw entire cities built in the middle of nowhere surrounded by farms, and looking like no one lives there. Also, my chinese gf's family all owns multiple vacant properties because it's just in the culture to own extra homes. They have homes worth 100k-200k USD equivalent and they make ZERO ROI on them, instead of throwing it into the SP500 and make 10.5%. That's how entrenched the manic bubble of home ownership has become in China.

@Ilovecruise 8 ай бұрын

In Chinese culture, stock is a lot more volatile where most people think of it no different from gamble/ unable to compete with financial institutions. In contrast a “house” as in completed house/paid are much safer and its value are likely to increase (even if prices fall, they still own their houses. In simple terms, the Chinese market treat housing investment as a low risk choice

@youarebeingtrolled6954 8 ай бұрын

Are empty ghost cities better or worse than toxic CDO’s and bad mortgages

@hangender 8 ай бұрын

Why did your girlfriend gamble with her entire family's money?

@joshuaguo1326 8 ай бұрын

They don’t have access to US equity markets.

@CarlosRodriguez-hb3vq 8 ай бұрын

10.5%???

@dixonpinfold2582 8 ай бұрын

Nantong's population is given as 7.7m, making it sound like an unheard-of metropolis, but this is for an extended area. Official sources give its metro population as ~2.5m. Moreover, it nearly borders on Shanghai and is often called North Shanghai. Last year it was announced that the 3rd airport for serving Shanghai will be built there.

@kabysummit5801 7 ай бұрын

US refers its own population the same way. Hence the problems they're facing, that people are reduced to stats or simply data.

@Xunxunism 7 ай бұрын

Are you sure a 3rd airport is necessary?

@zelllers 8 ай бұрын

In Canada we have opposite problem.

@DW-op7ly 7 ай бұрын

It’s actually not much different In China in 2008 around 70% of the people in their real estate markets were buying their 1st homes in their cities By 2018 around 70% of the people in their real estate markets were buying their 2nd and 3rd homes in their cities That’s why you are hearing about problems with their property developers these days. Because back in 2010? Their Central Government started cutting of money flow to these developers. Thus why you heard about Shadow Banks and Underground Economy back then, that their Government had to come into to shutdown or regulate. Even then, It took them almost 14 years to get their overheated real estate under control Heck they were about to introduce a nation wide property tax, but then trump started the trade war in 2018 Why is their Central Government doing this? Because there are still a few hundred million poorer rural folk they still expect to move to the cities to join their more well off urban city folk countrymen. Problem is these property developers were building higher end homes, and not building the affordable homes these rural migrants will need In China Owning a home in the city you migrate to? Affects your employment, health, education and even marriage prospects don’t have a house you don’t get married Thus the common prosperity push and the crackdown on the overt displays of wealth in China Their Government probably figured out you disenfranchise the people at the bottom of your society they are the ones most likely to act out in protest

@antoncarmoducchi6057 7 ай бұрын

no, the same problem, different outcome. a dictator.

@DW-op7ly 7 ай бұрын

Dictators were not the only reason The USA has the same problem, as did most countries had the same problems because of low interest rates It created very little investment options other than overheating crypto, stock, and real estate markets The only reason central banks started raising rates was because of consumer staples inflation brought on by the Russian invasion of Ukraine and China zero Covid Mind you countries that people like you want to decouple from, which we would go without or raise prices even more For central banks they probably figured people like you would mind less if their home values go down a bit vs not being able to put food on the table

@DunDun-e43 7 ай бұрын

@@DW-op7lyIf anything they not high end enough or designed in a human way possible. I don’t care how luxurious they make them inside, row after row of similar building in unnatural square and no real green parks instead concrete parks and not enough space to take a walk without being overshadowed. Even the house or mansion devs, no lawn and same same with no space between them. They really should design each place and have space in mind to exercise and also put damm balcony on the outside on tall buildings, dammm, they look like domino that will fall any instant by being so slim rectangle all the buildings. Have more shape.

@DW-op7ly 7 ай бұрын

Well now you are just giving western opinions on what they deem as a nice home Here is my opinion in the west we want that picket fence and green grass I notice many Chinese immigrants build right up to the side walk. With a big drive way instead to store all their cars My sister just had a neighbour from China build their new house, right up to the property line they built so close they asked to move the fence more onto my sisters property because one of the side doors was hitting the fence when they opened it 🙄 My sister of course said no ….

@user-iz3gv5vo6b 8 ай бұрын

2:38 That's a picture of Hong Kong, which has the exact opposite of the excess homes of "ghost cities" in China. Even with a recent decline in prices, Hong Kong apartments are still among the most expensive in the world, and the vacancy rate is among the lowest.

@lppoqql 8 ай бұрын

Good, just like Japan before any country that engages in real estate frenzy will have a crisis. I hope everyone learn not to prop up the real estate bubble. I'm looking at you Canada.

@JJJohnson441 8 ай бұрын

Keep dreaming renter

@lppoqql 8 ай бұрын

@@JJJohnson441 Sorry kid, I have rental units. I'm just telling the truth. Go do something productive instead of flipping houses. Only the unskilled horde houses because they cant do anything else.

@serena-yu 7 ай бұрын

And Australia.

@TurnkeyTrading 8 ай бұрын

I have been hearing about China's economy and real estate crash for ten years.

@mr.impact7368 8 ай бұрын

only 7.7 mil, what a tiny village

@Funktastico 8 ай бұрын

Yes 7.7 mil is only 0.5% of their 1412 million population

@kabysummit5801 7 ай бұрын

@@Funktasticothese are people we're talking about

@MichaelChengSanJose 8 ай бұрын

Can’t fault the Chinese for being property crazy. With the capital controls, there’s literally no other investment option. You can’t invest in most stocks as companies are heavily controlled by the government. It’s better to take an empty condo than to have cash sit around earning nothing.

@stant7122 8 ай бұрын

She said there’s an estimate the homes will be filled in 5 years. That’s not very long. Sounds like a short term problem

@bullpup1337 8 ай бұрын

5 years is short term for you? 😮

@MichaelChengSanJose 8 ай бұрын

@@stant7122That’s wildly too optimistic. Those homes will take decades or longer to fill. Many of them are not in productive cities where young people with money want to go. And many of them will decay too much in the next few years to be worth fixing up to live in.

@MichaelChengSanJose 8 ай бұрын

@@bullpup1337Yeah, it’s going to take way longer than 5 years. But in China, even 10 years is short term.

@DW-op7ly 8 ай бұрын

Where are you getting Chinese stock markets are Government controlled Yes they might step in But there are no market makers 85% of the trades are done by retail mom and pops 81% make atleast 1 trade a month And 67% have not graduated highschool 👇 Why China's stock market bubble was always bound to burst | Orville Schell Jul 16, 2015 - According to one widely cited survey of these new investors, 67% of them have less than a high-school education. The Guardian

@williamhogarth7423 8 ай бұрын

USA is on the road to this as well. During covid all the bank loans for crap luxury building went from China to the US. GFC 2.0 won't be caused by subprime lending but luxury and office

@headspaceandtiming2114 8 ай бұрын

A lot of commercial real estate loans are coming due. Investment companies will walk and leave the burden on the banks. The Fed Government will bail them out. Nothing to worry about people. Just keep printing money and telling us how great the economy is growing.

@backupkuzas 8 ай бұрын

Its worth noting the sector is not nearly as big as the residential sector, and the investors and institutions involved can handle stress. It seems unlikely that that problem is a systemic risk to the financial system

@empcaligula3032 7 ай бұрын

This makes the 2009 financial crisis look mild. It took US over a decade to completely recover and there are still lingering effects. China’s property crisis seems catastrophic.

@jooky87 8 ай бұрын

Move all the buildings to Canada and Australia!

@bullpup1337 8 ай бұрын

sure, shall we ship them by plane or by boat? do you want us to gift wrap them?

@jonathansoto9079 8 ай бұрын

This is exactly what we need in the U.S

@weho_brian 8 ай бұрын

65% of American people who are homeowners disagree with you

@DW-op7ly 7 ай бұрын

90% of Chinese own a home 80% free of any encumbrances The issue is owning a home in their cities and the 70% of the Chinese in those markets buying their 2nd and 3rd homes even with a crackdown

@OutLongWalking 8 ай бұрын

"you can't just build and they will come" the issue is that for a very long time you could build and they will BUY. Usually not to live in but as investment properties or a "secure" space to park their nest eggs, family savings, retirements, etc. The realization that most of this money is gone will be a hard one for many people in China

@RobRoy351 8 ай бұрын

No - that mindset only reduces the corn output of your farmland.

@DW-op7ly 7 ай бұрын

China actually has a oversupply of higher end homes but not affordable homes In China in 2008 around 70% of the people in their real estate markets were buying their 1st homes in their cities By 2018 around 70% of the people in their real estate markets were buying their 2nd and 3rd homes in their cities That’s why you are hearing about problems with their property developers these days. Because back in 2010? Their Central Government started cutting of money flow to these developers. Thus why you heard about Shadow Banks and Underground Economy back then, that their Government had to come into to shutdown or regulate. Even then, It took them almost 14 years to get their overheated real estate under control Heck they were about to introduce a nation wide property tax, but then trump started the trade war in 2018 Why is their Central Government doing this? Because there are still a few hundred million poorer rural folk they still expect to move to the cities to join their more well off urban city folk countrymen. Problem is these property developers were building higher end homes, and not building the affordable homes these rural migrants will need In China Owning a home in the city you migrate to? Affects your employment, health, education and even marriage prospects don’t have a house you don’t get married Thus the common prosperity push and the crackdown on the overt displays of wealth in China Their Government probably figured out you disenfranchise the people at the bottom of your society they are the ones most likely to act out in protest

@sarcasmo57 7 ай бұрын

It always seemed crazy they way they overbuild housing on such massive scale for decades.

@chiaweinam 8 ай бұрын

they have been talking about the collapse of china's economy for decades but when was the last time this korean woman reported some positive news about china?

@mrtee3477 8 ай бұрын

It's beginning, and the US will follow.

@absusup 8 ай бұрын

she reports the truth

@Yenhongsin77 8 ай бұрын

if no news from her, that means no bad news she can find.

@vegamoonlight 8 ай бұрын

@@mrtee3477you have more homeless people. China has a surplus of housing units that can be occupied after a year or more. The ghost cities that the Western media have been reporting since 2000's have now been occupied. They have centralized planning but your government does not have.

@DW-op7ly 8 ай бұрын

In China in 2008 around 70% of the people in their real estate markets were buying their 1st homes in their cities By 2018 around 70% of the people in their real estate markets were buying their 2nd and 3rd homes in their cities That’s why you are hearing about problems with their property developers these days. Because back in 2010? Their Central Government started cutting of money flow to these developers. Thus why you heard about Shadow Banks and Underground Economy back then, that their Government had to come into to shutdown or regulate. Even then, It took them almost 14 years to get their overheated real estate under control Heck they were about to introduce a nation wide property tax, but then trump started the trade war in 2018 Why is their Central Government doing this? Because there are still a few hundred million poorer rural folk they still expect to move to the cities to join their more well off urban city folk countrymen. Problem is these property developers were building higher end homes, and not building the affordable homes these rural migrants will need In China Owning a home in the city you migrate to? Affects your employment, health, education and even marriage prospects don’t have a house you don’t get married Thus the common prosperity push and the crackdown on the overt displays of wealth in China Their Government probably figured out you disenfranchise the people at the bottom of your society they are the ones most likely to act out in protest

@graphdatascientist 8 ай бұрын

7.7 million people is a metropolis

@NomadicAstro 8 ай бұрын

That’s rather 4-5th tier town in China tho.

@yangz1803 8 ай бұрын

A 7.7 million population city is quite often a average size city in China.

@therandomactivist1124 7 ай бұрын

Not by chinese standards it's not 😂

@toram6210 8 ай бұрын

Cnbc should report the ones in USA too

@luiscastillo7009 8 ай бұрын

a small village in China has 2 million people

@jasonhutchinson8060 8 ай бұрын

Which intern did the sound on this?

@harrysmith8515 8 ай бұрын

Unlike US, China has no property tax. People can afford to hold a few properties and wait for them to appreciate in value. That is the model many people use to become multiple millionaire in the last 2 decades.

@crosslink1493 7 ай бұрын

I know its a little different property model in China, but I thought the government owned the land, and the buildings on that land are essentially "leased' by the (so-called) "owners" for long terms of 60-90 years. So no private property to impose taxes on. And property is about the only thing a person/family can invest in for the future as there are capital controls that thwart most investment options like in the West, and no one trusts the stock exchanges as a way to invest (lack of financial transparency).

@DW-op7ly 7 ай бұрын

Saturday, April 15, 2017 Full Private Land Ownership Returns to China’s Cities I don’t see how to read this other than as a promise of perpetual free renewals. This means that people who paid for a 70-year LUR now find themselves with a perpetual LUR: the equivalent of full fee simple ownership. That’s worth noticing. Law professors typepad

@DW-op7ly 7 ай бұрын

Basically many in the west are complaining because they are cracking down on property speculation in China…. Yet cheering on our own crackdown on speculators here The other option is 70% of the Chinese in their real estate markets buying their 4th or 5th home right about now In China in 2008 around 70% of the people in their real estate markets were buying their 1st homes in their cities By 2018 around 70% of the people in their real estate markets were buying their 2nd and 3rd homes in their cities That’s why you are hearing about problems with their property developers these days. Because back in 2010? Their Central Government started cutting of money flow to these developers. Thus why you heard about Shadow Banks and Underground Economy back then, that their Government had to come into to shutdown or regulate. Even then, It took them almost 14 years to get their overheated real estate under control Heck they were about to introduce a nation wide property tax, but then trump started the trade war in 2018 Why is their Central Government doing this? Because there are still a few hundred million poorer rural folk they still expect to move to the cities to join their more well off urban city folk countrymen. Problem is these property developers were building higher end homes, and not building the affordable homes these rural migrants will need In China Owning a home in the city you migrate to? Affects your employment, health, education and even marriage prospects don’t have a house you don’t get married Thus the common prosperity push and the crackdown on the overt displays of wealth in China Their Government probably figured out you disenfranchise the people at the bottom of your society they are the ones most likely to act out in protest

@paranoidhumanoid 7 ай бұрын

There is no country on earth, including here in the US, where property is outright owned by private individuals. If you stop paying property taxes on a home that is paid off, the state seizes your land. If the state finds your property is sitting on utilities lines or natural resources, eminent domain provides for the state to legally seize the property. You're basically leasing land, as the Chinese do, from the state. It's just a matter of semantics.

@DW-op7ly 7 ай бұрын

Yes so true here in Canada I owned a commercial property (2 lots) zoned for light industrial with living units on top The Government came And took it citing eminent domain as they put a skytrain across it I got 300k This was before the line developed the city and we had a influx of immigrants Now I figure it would be worth 2.6 million Atleast being on the main road in the city empty lot on the outskirts of the city would net about 1.3 million for each lot

@robhappe906 8 ай бұрын

It also means that a big part of savings is worthless

@amunra5330 8 ай бұрын

Actually, what western media is not saying is that first time home buyers is booming in China.i plan to buy a home when I get married this year.

@darylb5564 8 ай бұрын

They want 30 year olds to buy these places. I spoke with a doctor friend and she told me it takes like 30 years to make a 30 year old. They may need a flux capacitor to address this issue…

@DW-op7ly 7 ай бұрын

@david_dor 8 ай бұрын

Well at least we won't have to worry about that here in the USA anytime soon, lol.

@Ray-ou6ig 8 ай бұрын

Yeah, we’re in a housing crisis over here.

@NomadicAstro 8 ай бұрын

Housing shortage here in the states. At least people have access to cheap housing in China if they needed one. Real good setup for re upping on population growth which I think is in the cards for the Chinese.

@DW-op7ly 8 ай бұрын

@stephenbans518 7 ай бұрын

@@NomadicAstro You can't force people to have children, they aren't rabbits. Once china fixes its cultural problem, then people will have kids.

@3506Dodge 8 ай бұрын

Five years! Most of those apartments will never be sold or used in any way.

@backupkuzas 8 ай бұрын

You don't have to go off the beaten path to find this. Tianjin, a second tier city with the status of being one of the 4 municipalities that directly answers to the central government, has an entire "manhattan" district sitting eerily empty, and unrelated to that development but notable on this subject, the world's tallest incomplete skyscraper siting abandoned as well. Imagine a structure bigger than one world trade center just empty and abandoned on your skyline, that's an embarrassing symbol isn't it... Skyscraper booms actually may be an indicator of the final cycle of low productivity and malinvestment in an overheated economy before a recession, and China has recently seen the largest in history as part of this massive real estate boom, it was so over the top the government put height limits on the countries cities.

@MainMan7012 7 ай бұрын

26 million unsold homes probably grossly understated.

@andrewmccoll1582 8 ай бұрын

If there is overbuilding, then developers should be forced to sell them. Is the issue that they won't part with them at a price they would accept?

@chriswhynder8311 8 ай бұрын

They built them out in the countryside with hopes the area grew which it did not leaving nothing but empty high risers with some of them not even finished

@andrewmccoll1582 8 ай бұрын

@chriswhynder8311 well, I hope a lot of developers lose their shirts on it. Unlikely as the real ones who made the decisions are now wealthy beyond compare.

@celestialtl 7 ай бұрын

The USA investors bought them as investments by loaning the cash…and now they aren’t getting back a dime

@FinDDYouTube 8 ай бұрын

The Chinese stock market is looking attractive, especially the tech sector. All these housing issues are not going to stop the Chinese people from using their versions of google, amazon, and Facebook on a daily basis. CQQQ

@DW-op7ly 7 ай бұрын

No secret with their stock market with 85% of the trades made by mom and pops you will get wild swings from one way or the other

@jamesfung3347 8 ай бұрын

These are the lucky ones, many Chinese owned unfinished abandoned apartments with a big mortgage.

@andrewjones3251 8 ай бұрын

CNBC late to the news again. This has been going on for years!

@Patrick-yh5yd 8 ай бұрын

CNBC looks at every angle to see if the rich will be effected first.

@williamwallace2386 8 ай бұрын

Let's say Home owners paid 1 million dollar for 500k USD home. Unfortunately, the developers also probably paid double for the materials to build the houses. Then the suppliers' cost to manufacture the materials is probably double as well and so on... They might be thinking that the credits will eventually be paid and there will be a return of investment in the future. Unfortunately, it did not happen. China created a pseudo income with these houses so it will be very difficult to navigate this crisis especially if there are no interested buyers. If they lower the prices of the houses, then it will affect the prices of the value of other properties like the 2008 real estate crisis in the US. with deflation now very rampant in China, lowering the houses will further collapse the market especially the banks who have massive investments in these properties. what a mess

@DW-op7ly 7 ай бұрын

China still has a few hundred million rural migrants they still expect to migrate to the cities Only problem is there is no affordable housing being made for them only these higher end homes Be nice if these rural migrants could get their hands on these properties But my guess is they will get snapped up by the more well off Chinese

@SavanaT 8 ай бұрын

The irony - in China they over built homes. In America - we under build homes. How about we meet somewhere in the middle? China is building great national / city infrastructure, while in America, our infrastructure is crumbling..... in China they aspire to buy real estate, in America, we aspire to buy trinkets, TVs and tech gadgets 🙏

@williamku2980 8 ай бұрын

How much of the US mutual fund monies are invested in those?

@brunoheggli2888 8 ай бұрын

Near zero!

@DW-op7ly 8 ай бұрын

Probably a ton

@DW-op7ly 8 ай бұрын

A 99% Bond Wipeout Hands Hedge Funds a Harsh Lesson on China Bloomberg) -- From afar, China Evergrande Group had all the makings of a killer distressed-debt trade: $19 billion in defaulted offshore bonds; $242 billion in assets; and a government that appeared determined to prop up the country’s faltering property market. So US and European hedge funds piled into the debt, envisioning big payouts to juice their returns. What they got instead over the course of the next two years is a harsh lesson in the dangers of trying to bargain with the Communist Party. The talks are now dead - a Hong Kong court has ordered Evergrande’s liquidation, and the bonds are nearly worthless, trading in secondary markets at just 1 cent on the dollar. Bloomberg

@grod805 8 ай бұрын

Why would they be?

@weho_brian 8 ай бұрын

thats why you should buy stocks and not mutual fund/indexes

@kyungshim6483 8 ай бұрын

With a declining population, how are they going to manage to sell those units? Yikes!

@adamyang914 7 ай бұрын

That's my hometown. Glad I sold my apartment and moved to the US in 2019

@NomadicAstro 8 ай бұрын

Cheap housing has always been catalyst for population growth in China. With slow down in the last couple of years, the Chinese got serious when it comes to riddance of growth road blocks.

@princesskaitlinhazelwood4703 8 ай бұрын

Why in the world do t they sell them for a dollar, so everyone can have a home? It is crazy.

@DW-op7ly 8 ай бұрын

@princesskaitlinhazelwood4703 8 ай бұрын

Just seems to be a shame to have whole empty cities when there are so many poor Chinese families with out a single home. Such a waste.

@williamwallace2386 8 ай бұрын

it's not that easy boy. the people who bought these apartments paid millions (overpriced units). now if the developers sell them for a dollar, then the original home buyers will definitely lose money since their homes' value will be tantamount to 1 dollar.

@princesskaitlinhazelwood4703 8 ай бұрын

Sure but having them sit empty is not helping th value either. Someone is going to lose and the ccp doesn’t mid if investors lose. Common prosperity

@williamwallace2386 8 ай бұрын

@@princesskaitlinhazelwood4703 Home owners probably paid 1 million dollar for 500k USD home is a big mistake for these home buyers. Unfortunately, the developers also probably paid double for the materials to build the houses. And the suppliers also probably paid double to manufacture the materials and it goes on and on. China created a pseudo income with these houses so it will be very difficult to navigate this crisis especially if there are no interested buyers. If they lower the prices of the houses, then it will affect the prices of the value of other properties. Other home owners that have money to pay their current mortage may stop doing it if they see that there are homes that are worth less than the homes that they are currently buying. what a mess.

@ostingonerazan6451 7 ай бұрын

as early as three/two years ago other institutions have shouting about this anomaly. and its only now that CNBC Squak box taking note of this. Shame on you!

@WellSalt-Studio 8 ай бұрын

Americans first go to the supermarket near home to check the prices, which represents the fact.

@currentphonograph7487 8 ай бұрын

Invest in China. Love CNBC

@GK-qc5ry 8 ай бұрын

I wonder if I'd in the meantime waiting for a buyer the properties start to fall into disrepair which further decreases the selling price.

@DW-op7ly 8 ай бұрын

These were property developers cut off from money flow by their Central Government 14 years ago But they were recently saved as their Junk Bonds started to become hot commodities these last few years So as a Developer what to you do when you get an influx of Cash???? You build…. This is what was happening before this 👇 * Even though there are between 20 and 45 million unoccupied homes across China, which account for roughly 600 million square meters of uninhabited floor space - enough to completely cover Madrid, these places are not the urban wastelands they are often posited to be. While many of China’s new cities and urban districts are deficient in people they are not deficient in owners. Nearly every apartment that goes on the market in China is quickly purchased, often at exorbitant prices that commonly range in the hundreds of thousands of dollars. Far from being unwanted infrastructure that could seamlessly be doled out to refugees, those arrays of vacant high-rises are actually the proud possessions of people who paid a lot of money for them. So why would anyone spend incredible amounts of cash on houses they do not intent to use? * A huge portion of the homes that are purchased in China function very much like stocks or a trade-able commodity. As an incredible amount of new apartments are sold as unfinished concrete cavities without any interior fit out or even windows, they are in no way immediately livable. Although they are very actively bought and sold in this bare-bones form, which is often preferred by investors. In many ways they are purely economic entities, quantifiable placeholders of value that are traded on the open market akin to precious metals. Just as one doesn’t need to mold a piece of gold into something usable like a piece of jewelry for it to have value and an economic function, an apartment in China doesn’t need to have people living in it for it to be economically viable. “Empty units leave flexibility for quick sales in a changing market or need to cash in quickly,” said Barry Wilson, the founding director of Barry Wilson Project Initiatives, a Hong Kong based urban design firm. Another reason for the sheer amount of unused apartments in China is the fact that there is often little financial incentive for owners to do anything with them after purchase. There is no yearly property tax in China, so vacant properties are not a financial drain on their owners. While the potential returns that could be had from renting them out (1% or so) is often not worth the hassle - especially because it costs tens of thousands of dollars to construct the interiors of new apartments in preparation for tenants. This is combined with the fact that Chinese homeowners, especially investors who have multiple properties, are remarkably un-leveraged. According to Mark Tanner, over 80% of homes in China are owned outright. This means that most homeowners, especially the big investors with multiple properties, generally don’t have any mortgages to pay off or any other leans, so there isn’t as much financial pressure to make a profit from these homes in the short term. Thevagabondjourney

@toml1173 8 ай бұрын

In Canada, we are in short supply of millions units.😢

@cabbyw 8 ай бұрын

All part of the natural exconomic cycle. This overbuilding issue happened in some many countries in various times. Market force will digrest them in time for sure. Not that big a deal, really.

@crazyfox5858 8 ай бұрын

Stay safe Eunice

@Trgn 8 ай бұрын

Safer anywhere in East Asia than the streets of America

@artfquinn 8 ай бұрын

@@Trgn But in China, you will get arrested because of statements on Internet. Including stating a fact.

@kenyup7936 8 ай бұрын

As Chinese we have property culture, if someone needs to get married , he needs a property,the parents woman side are super realistic in general,they won’t allow their daughter marry a man who doesn’t has a property , I don’t think any nation in this world is like us who is crazy about real estate . As average ppl like me, my salary is like $700 equivalent per month, a decent property in our city like $1 million, I def never ever have chance buy one, if I don’t spend my single money for anything, I still need to wait some decades can afford it

@DW-op7ly 8 ай бұрын

Well the Chinese Government started to crack down on speculative investment in 2010 Hopefully you can get something affordable Ideally the Government should mandate these homes most likely built by bankrupt developers for people like you just starting out My guess is Rich Chinese will buy up these homes as an investment 😔

@jw999 8 ай бұрын

Sorry to hear that man!!

@kenyup7936 8 ай бұрын

@@jw999im not trying to complaint, dont worry, actaully im leaving to this country, but my destination is not america, at least I could find some hope in somewhere else

@chunhchan 7 ай бұрын

Property is for living not investment

@drunkntigr 8 ай бұрын

bruh we know it's screwed. but what do you wan them to do? the worse they get, the worse it is for us. Chinese wealth depends on placing it on property, without a rise in property prices, they ain't going to spend, means less money for us. We will literally lose spending from 20% of the worlds population. And it will take decades before enough Indian middle class has enough cash to spend externally.

@incipidsigninsetup 8 ай бұрын

The only markets that are flourishing are the US markets. If you're investing and stability is important to you, then there's nowhere else to go. Besides, there are more opportunities to gain wealth in a down economy if you've prepared for it and have the dry powder ready to take advantage. China's woes are a net plus, in my opinion.

@DW-op7ly 8 ай бұрын

@als8627 8 ай бұрын

Its funny. Its really the buyer in this case the Chinese their own mistake. Its for years already clear people pay more for their house than what they actually earn. They borrow money from uncles aunts to buy a house. To say own a house doesnt mean the couple. Sometimes 5 people own it. When a Chinese earns 8000 rmb a month how is it realistic to buy an overpriced 800,000 usd home of 50m2. They always thought government will help. And the house price will fly to the moon. No its not. Speculation means it needs to go down. Realistically its all should be 70% cheaper based on income. The issue there are so many issues and shadows that now nobody wants panic. So the government wants to bubble to pop slowly

@tonylinardi3089 7 ай бұрын

This is not a new development. This has been known and going on for over a decade. No cutting edge news here.

@nickphang2293 8 ай бұрын

U kidding ? Where have u been? We been voting yes for past 30 yrs, and nothing has change ! Same lies and lies! Where has the money goes? This time , vote No!!!!

@nicklasmillner101 8 ай бұрын

As we pay exorbitant interest, on debt , no room to criticize.

@janosik150 8 ай бұрын

So basically they build too much in wrong places ..

@Richard-s7m 7 ай бұрын

Miss komichi should sticking with komichi fermentation.

@willtwain1383 8 ай бұрын

Kernen needs new shirts. He must have dried them on the hot cycle, or needs to sell the refrigerator.

@jmcc9954 8 ай бұрын

I hope the bubble pops soon here in the USA, the prices for ugly old looking houses are ridiculous at around 400k. Now imagine the new nice looking homes? Upwards of 800k

@abujabi 8 ай бұрын

You're looking at $1.1 million for a 60 year old house with plumbing and foundation issues where I'm from.

@MichaelChengSanJose 8 ай бұрын

Ugly homes in the Bay Area start at $800K, if you can even find one. Half decent homes are $1.6M and up. Guess what, home prices are only climbing higher as the people with money are making more than ever. Wishing for a massive 30-40% price correction like 2010 is a pipe dream. If you can find a 5-10% discount, jump all over it.

@brodobroggins 8 ай бұрын

US has the opposite issue of under supply. Since interest rates are so high now people are also not leaving their houses they bought during the low interest rate era and that further reduces available supply.

@DW-op7ly 8 ай бұрын

2.2 million in a home where I’m from

@DW-op7ly 8 ай бұрын

@Skullkeed 8 ай бұрын

china is all about quantity not quality

@jacksmith-mu3ee 8 ай бұрын

China builds Usa destroys

@kennethvenezia4400 8 ай бұрын

No, it's not, "build it, and they will come." They will not come because they don't exist in those numbers. With demographic collapse, it will never get better for generations, and that's providing they start having children again. I sadly don't see it. It's such a sad story.

@lokesh303101 8 ай бұрын

Loan Rates for Unsold Units need to be 2% Interest Rates.

@jw999 8 ай бұрын

It's weird to watch an Asian journalist travel in an Asian country (China), and seemingly take so much pleasure in explaining how everything sucks so bad...

@samyang1412 8 ай бұрын

That's like saying a Canadian reporting on a story in the US ... Eunice is Korean-American reporting on a city in China. Not all "Asians" are from the same country.

@DW-op7ly 8 ай бұрын

CNBC is a little biased This was all by design by the Chinese Central Government In China in 2008 around 70% of the people in their real estate markets were buying their 1st homes in their cities By 2018 around 70% of the people in their real estate markets were buying their 2nd and 3rd homes in their cities That’s why you are hearing about problems with their property developers these days. Because back in 2010? Their Central Government started cutting of money flow to these developers. Thus why you heard about Shadow Banks and Underground Economy back then, that their Government had to come into to shutdown or regulate. Even then, It took them almost 14 years to get their overheated real estate under control Heck they were about to introduce a nation wide property tax, but then trump started the trade war in 2018 Why is their Central Government doing this? Because there are still a few hundred million poorer rural folk they still expect to move to the cities to join their more well off urban city folk countrymen. Problem is these property developers were building higher end homes, and not building the affordable homes these rural migrants will need In China Owning a home in the city you migrate to? Affects your employment, health, education and even marriage prospects don’t have a house you don’t get married Thus the common prosperity push and the crackdown on the overt displays of wealth in China Their Government probably figured out you disenfranchise the people at the bottom of your society they are the ones most likely to act out in protest

@jw999 8 ай бұрын

@@samyang1412 No. It's more like a Canadian working for a Chinese company, traveling around the US and reporting back to his Chinese boss how everything sucks in the US. He does it in perfect Mandarin and with a gleaming smile...

@jw999 8 ай бұрын

@@DW-op7ly Tks for the details, man! Well, pretty much all media badmouth China these days... After all, we always need a villain!!

@RacerX1971 7 ай бұрын

Now if we just stop buying from Temu, their economy would surely tank😂😂😂

@derrikarenal3308 8 ай бұрын

so, we need a ferry; excess people in Canada to empty housing in China.

@nicklasmillner101 8 ай бұрын

This is insane! It's opposite of the USA , issues, sort of .....

@shaunmc013 8 ай бұрын

Wow - such beautiful homes also, the answer to this is they need to create a multicultural society. That’s how the U.S. and Canada has been surviving..

@DW-op7ly 8 ай бұрын

Somehow I think you are in the less immigrants crowd

@ProjectILT 7 ай бұрын

And you haven't even talked about the tofu dreg build quality problems of chinese buildings where you never know if they're gonna cut corners on the building material for your high-rise and use "concrete" that falls apart if you scratch at it with your fingers

@GrantDobbie-fq5yy 8 ай бұрын

How awkward the anchor

@user-fb6hy2eh5y 8 ай бұрын

Kickbacks in the real estate sector...

@peterbedford2610 8 ай бұрын

Two word Joe..Jenny Craig

@robertdavis5714 8 ай бұрын

How bad is this, this Country in early 2000's in 2 years poured more concrete than that of the USA from 1900 - 2000 (100 years)

@chintandobariya472 8 ай бұрын

Hong Kong was too over priced. It has to corrected.

@heneliezer1421 8 ай бұрын

PE of around 7 now

@esparda07 8 ай бұрын

There's only 7.7M in this city, we can't find enough people @.@

@xetradax2679 7 ай бұрын

such an unprofessional reporter, such a bad sound inside an empty building. how did they allow this to be on a tv?

@youarebeingtrolled6954 8 ай бұрын

If only all the young people in north america who cant afford a house moved to china🧐

@nicholascage3699 8 ай бұрын

1.6 billion ! Iam not worried

@MinchoRusev 8 ай бұрын

Homeless issue is resolved 😅😅😅

@xieibrahim7304 8 ай бұрын

Hard to find any homeless people in the streets of any Metropolis taking Shanghai as an example. House bubble is a pure investment issue in China. Not like any other country.

@sara.cbc92 7 ай бұрын

Hey Yoon, how's the living hell that is S Korea? ^^

@robertlee6338 8 ай бұрын

Vhina Realestate meltdown is so much much managed than Lehman Bros

@Bmwstephen 8 ай бұрын

import them to the US

@vitran4141 8 ай бұрын

We got some migrants that we can send them but they have a large unemployment anyway

@Richard-s7m 7 ай бұрын

Just looking at the traffic flow at the background people,she is paid to lie.

@MarkDanielLouwe 7 ай бұрын

Planning to visit Beijing this year to reconnect. Filipino-chinese here.

@CanadaTaxChannel 7 ай бұрын

Sounds like what is coming to Canada

@Michael-o3h 8 ай бұрын

Those ghost cities will be used eventually, the infrastructure is there. Manufacturing will move thete and so will the populations to work them.😅😅

@freedomstripe 8 ай бұрын

Anyone remember the US housing melt down of 2008? This is going to be much, much worse. And the ripple effects are going to hurt the world economy’s. China is the second largest economy of the world. UK and Japan have already slipped in recession, and I think it’s going to get worse before it gets better better

@Trgn 8 ай бұрын

The nature of the 2 bubble and recession is different. US was much worse because the banking and finance system had lots of subprime mortgages lending out to borrowers incapable of paying back, which led to the whole banking collapse. China current recession is just the slowing down of property market, lower house prices so a few developers went burst, but home borrowers are still able to pay the banks. Less supply of homes means their house prices will eventually rise again and the market will stabilize

@DW-op7ly 8 ай бұрын

This was by design In China in 2008 around 70% of the people in their real estate markets were buying their 1st homes in their cities By 2018 around 70% of the people in their real estate markets were buying their 2nd and 3rd homes in their cities That’s why you are hearing about problems with their property developers these days. Because back in 2010? Their Central Government started cutting of money flow to these developers. Thus why you heard about Shadow Banks and Underground Economy back then, that their Government had to come into to shutdown or regulate. Even then, It took them almost 14 years to get their overheated real estate under control Heck they were about to introduce a nation wide property tax, but then trump started the trade war in 2018 Why is their Central Government doing this? Because there are still a few hundred million poorer rural folk they still expect to move to the cities to join their more well off urban city folk countrymen. Problem is these property developers were building higher end homes, and not building the affordable homes these rural migrants will need In China Owning a home in the city you migrate to? Affects your employment, health, education and even marriage prospects don’t have a house you don’t get married Thus the common prosperity push and the crackdown on the overt displays of wealth in China Their Government probably figured out you disenfranchise the people at the bottom of your society they are the ones most likely to act out in protest

@setheheart4911 7 ай бұрын

Eunice looks cold af lol

@expand9487 8 ай бұрын

I though it was iligal to report bad things about the economy.

@john_doe_not_found 8 ай бұрын

Home values in China rose every year for 30 years straight. So an entire generation grew up thinking of homes as an investment. The CCP has the unenviable position of trying to plan a path for 1.4 billion to exit poverty. They sort of achieved it for 600M more or less. But there are still about 2 America's worth of people living in poverty in China who have not transitioned out of the small town rural life. If another America's worth of people did make that transition, then China would be back to building homes like crazy. If not, then, there's going to be several 10s of millions of empty homes that none of the poor rural folks will never transition to.

@jacksmith-mu3ee 8 ай бұрын

Yeah then why sre American military bases near China ? Close them why don't u

@Mike_Davidson 7 ай бұрын

Build it and they will come. Kinda like EV’s? 🤷🏻‍♂️😂😂😂

@chocolatesoldiertv7284 8 ай бұрын

China has houses that can accommodate everyone on earth x2

@youarebeingtrolled6954 8 ай бұрын

Theres millions of empty homes in usa and canada that are owned by chinese not living there. When that bubble pops its gonna make 2007-2008 seem like a fart in the wind😂

@JW-hf9ev 8 ай бұрын

I’ll buy a house from China, I’ll use my Amazon Prime to have it delivered 👀

@nicklasmillner101 8 ай бұрын

Will China import, people?

@Wuyifrom 8 ай бұрын

Welcome to China my friends!

@jacksmith-mu3ee 8 ай бұрын

Still better than usa

@MasterRichStocksOptions 8 ай бұрын

😎

@SamEbby 8 ай бұрын

unis is brave to be reporting on this from the belly of the beast in china

@jacksmith-mu3ee 8 ай бұрын

How is that brave ?

@shawnsmith524 8 ай бұрын

As china pop ages there will be millions of more houses on the market to sell/rent i think china needs wait good 30/50 years befor they start building again need wait for the Tofu to start collapesing

@DW-op7ly 8 ай бұрын

Chinese these last few years are adding around 2.5 trillion a year to their wealth. Even with this downturn They can’t take it out of the country, returns from savings is not enough and the stock market is a casino For most real estate in China there is no property tax And for the Chinese you don’t own a home you don’t get married