1srelluc
Diamond Member
The Chi-Coms are infamous for artificially propping their housing market at the govenment level as a social economic control mechanism, inflating the value of property and thus making their economy look much stronger than it actually is.
Land is seen as the ultimate investment where the Chinese often pay 100% of the cost up front on projects that haven't even broken ground and may never be completed.
The main problem is this policy ties up cash flow when the Chinese market desperately needs liquidity versus tariffs and their already slowing economy. Its finally gotten so bad that the party did the unthinkable: They released the property price controls.
Property values are now in freefall without artificial pricing to hold them up and Chinese who traditionally saw property as the ultimate investment refuge are now loosing their asses. Valuation is seeing up to 50-75% losses and a panic sell-off is in progress in real time. Everything up to this point (going on 5-years now) was a slowdown. This is the meltdown.
China is basically totally dependent on home sales to prop up their economy. That’s what it’s all based on, from the top down.
They have been hoping it would stabilize from the collapse of Evergrande, Country Garden ext.
I think Trump's tariffs are going to be the domino that knock the others down.
