Chinese Property Market
Chinese Property Market How bad is the situation in Chinese real estate?
Home price to income ratios are extremely high compared to the West, but are they comparable?
How bad is this recent China Evergrande situation?
China Evergrande holds the rank of being the most indebted property developer on the whole planet. Furthermore, Evergrande’s liabilities amount to $300 billion.
See our recent piece on China Evergrande’s Ghost Cities.
Moreover, which put into perspective is equivalent to 2% of China’s Gross Domestic Product.
Moreover, the Chinese property market is insane.
You build an apartment and it will sell out before you start construction, nobody will move there.
Many Chinese citizens just need the apartments because the Chinese stock market is too risky in their view. And property in China has been a very safe investment historically.
Also you need to own property in a specific region in order to use the local services.
In addition, one might buy an apartment on the very edge of the city but rent another in the centre.
This way they can live close to where they work, hold an investment and own property which grants them the right to use the local services like healthcare.
