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by Tade0 80 days ago
China built a lot of housing and it didn't do anything until the ponzi scheme started unraveling.

Asymptotically what you said might be true, but before it gets there years might pass as they did in China. It's not clear how long this madness would last if not for COVID.
2 comments
nradov 80 days ago
Outside of the major city cores, much of what China built wasn't "housing" in the sense that most Westerners think of housing. The buildings often looked superficially like housing but were never really usable for that purpose. They were more like physical "tokens" used as speculative trading vehicles. Now some of those are being demolished, either due to lack of consumer demand or because the "tofu dreg" construction quality was so bad that they aren't safe to occupy.
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harvey9 80 days ago
I guess it wasn't housing in the sense that Chinese think of housing either, or more of it would have been occupied.
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peder 80 days ago
Housing prices cratered in China, because, yes, eventually supply catches up and then the ponzi schema has nowhere to go but down. Lots of people hold real estate thinking it's an investment just by itself, so it's been a vicious cycle of prices going up. But if you build enough supply, the market stops treating property that way.

I don't think the Chinese real estate market will ever truly "recover" to the Tulip Mania levels it hit before. Especially with a declining population.

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Tade0 79 days ago
Currently the housing price index in China is at 115/100 points in reference to 2010 - down from a peak of 145 in 2021.

That is what, 15 years and counting of waiting for the market to return to affordability despite using more concrete every 2-3 years throughout this time than the US did in the entire 20th century?

To quote Kimberly Wilkins: ain't nobody got time for that

Now, inevitably, the pendulum went the other direction - people lost money and companies went bankrupt.

You can't play fast and loose like that with such a basic need as housing.

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bpt3 79 days ago
Why is the cost in 2010 the maximum limit for affordability? Chinese household income has (supposedly) increased significantly over that time.
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Tade0 79 days ago
The price to income ratio is actually more damning:

https://en.macromicro.me/series/5433/china-housing-price-to-...

Considering the absolute number houses in China were not affordable at any point in recent history.

2010 is often cited as a reference point, most likely because it's when the Chinese stock market started experiencing a slump despite the initial post-2008 recovery, so investments shifted into real estate:

https://www.macrotrends.net/2592/shanghai-composite-index-ch...

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