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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsLA Times: China's housing bubble is losing air
Falling home values. Debt-strapped borrowers. Real estate woes dogging the economy. It's old news in the United States, but now the air has started to leak from another great housing bubble in China.
Home prices nationwide declined in November for the third straight month, according to an index of values in 100 major cities compiled by the China Index Academy, an independent real estate firm. Average prices in the Shanghai area are down about 40% from their peak in mid-2009, to about $176,000 for a 1,000-square-foot home.
Sales have plummeted. In Beijing, nearly two years' worth of inventory is clogging the market, and more than 1,000 real estate agencies have closed this year. Developers who once pre-sold housing projects within hours are growing desperate. A real estate company in the eastern city of Wenzhou is offering to throw in a new BMW with a home purchase.
The swift turnaround has stunned buyers such as Shanghai resident Mark Li, who thought prices had nowhere to go but up. The software engineer closed on a $250,000, three-bedroom apartment in August, only to watch weeks later as the developer slashed prices 25% on identical units to attract buyers in a slowing market. ...........(more)
The complete piece is at: http://www.latimes.com/business/la-fi-china-housing-bubble-20111213,0,6222603,full.story
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LA Times: China's housing bubble is losing air (Original Post)
marmar
Dec 2011
OP
napoleon_in_rags
(3,991 posts)1. That's an understatement. Have you heard of the "ghost cities"?
Only a google search does it justice:
https://www.google.com/search?sourceid=chrome&ie=UTF-8&q=ghost+cities+china
Frankly they seem awesome to me, I want to live in a ghost city, and write sci fi. I hope the line from the article "Experts say the government could also lift its buying restrictions." means I can buy an apartment in one, but it probably doesn't.
AdHocSolver
(2,561 posts)2. China is experiencing the effects of the "global economy" and "free trade".
When your best customers can no longer afford to buy your production, even when amassing super debt to do so, your economy is going to collapse as well.
Wall Street and its counterparts in other countries have certainly screwed the world's economies on a global basis.