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Urban Chinese Have Bet Everything On Their Homes

A weekend topic starting with the Wall Street Journal. “Even the coronavirus hasn’t stopped the world’s biggest asset bubble from getting bigger. After a brief pause during coronavirus lockdowns in February, a Chinese property boom in some megacities that many thought was unsustainable has resumed its relentless upward climb, with prices rising higher and investors chasing deals despite millions of job losses and other economic problems.”

“The resulting asset bubble, many economists say, now eclipses the one in U.S. housing in the 2000s. At the peak of the U.S. property boom, about $900 billion a year was being invested in residential real estate. In the 12 months ended in June, about $1.4 trillion was invested in Chinese housing.”

“The total value of Chinese homes and developers’ inventory hit $52 trillion in 2019, according to Goldman Sachs Group Inc., twice the size of the U.S. residential market and outstripping even the entire U.S. bond market. After a decade of rapid home-sales growth, fueled by borrowing, China’s household leverage ratio hit a record high of 57.7% in the first quarter. It was the biggest quarterly jump in the ratio, which measures families’ mortgage, consumer and other debts relative to gross domestic product, since the first quarter of 2010.”

“‘Property has hijacked China’s economy, so the government wouldn’t dare to push for a plunge in housing prices, even if that’s the most effective way to deflate the bubble,’ said Chen Zhiyu, who works for an American retailer and is looking to purchase a property in Shenzhen. ‘You gotta follow the money.'”

“Sales activity is also being driven by cash-strapped developers and the local governments that sell them land. Both need to gin up revenue to pay down debts or offset other problems, and are cooking up more incentives to move properties.”

“About 21% of homes in urban China were vacant in 2017—a very high proportion relative to international standards—which equated to 65 million empty units, according to the most recent data from China Household Finance Survey. Among families who owned two properties, the vacancy rate reached 39.4%, and among those that owned three or more, 48.2% were empty.”

“Rental yields—the proportion of a property’s value made annually by renting it out—are below 2% in major cities like Beijing, Shanghai, Shenzhen and Chengdu, less than can be made buying Chinese government bonds.”

“As recently as the 1990s, it was illegal under China’s communist system for most people to own homes. A State Council decision in 1998 abandoned the country’s system of employer-allocated housing, and homeownership took off. By late last year, about 96% of China’s urban households owned at least one home, according to a Chinese central bank survey released in April.”

“Average home prices across China reached 9.3 times average income in 2018, according to the Chinese Academy of Social Sciences, compared with 8.4 in San Francisco. In Tianjin, a city of 15 million southeast of Beijing, apartments in upscale areas sell for around $9,000 a square meter, or about $836 a square foot, according to real-estate services company Savills PLC. That is roughly the price an average buyer would pay in some of the most expensive parts of London, even though disposable incomes are seven times as high in London as in Tianjin.”

“In essence, urban Chinese have bet everything on their homes. They now have nearly 78% of their wealth tied up in residential property, versus 35% in the U.S. ‘While local governments are under pressure to prevent further surges in housing prices, what scares them more is a sharp decline,’ said Gao Fei, general manager at real-estate firm Centaline Group in Tianjin. They can ill afford to let the market go down. Income from land sales and related taxes on developers accounted for 52.9% of local governments’ revenue in 2019, a record high.”

“Yin Haiping, who runs a property consulting firm in Shenzhen, said fear of losing out is driving more buyers to look now, with home prices in some desirable areas up by at least 10% this year. Xu Xiaohua, a university lecturer in Tianjin who already owns a property there, just bought another apartment this month in Shenzhen. He paid 6.5 million yuan ($913,050) in cash in early May for the 50-square-meter (538-square-foot) property after checking out about a dozen apartments within a week.”

“He said he thinks most Chinese will park their wealth in real estate during downturns. ‘The worse China’s economy turns,’ he said, ‘the higher property prices in places like Shenzhen will climb.'”

From The Beijinger. “CCTV Finance reported last week that rental rates across Beijing plunged by nearly 20 percent in June, with Daxing and Fengtai districts – the two epicenters of the city’s recent COVID-19 flare-up – experiencing the most precipitous drops in demand at 41.7 percent and 37.1 percent, respectively.”

“Moreover, between Jun 15-21, the rental market’s total volume dipped more than a third, and average rental prices saw a 15 percent reduction, according to statistics from rental company Lianjia and cited by Global Times. To put that in perspective, the average rental price for a three-bedroom apartment in Chaoyang District has fallen nearly RMB 2,000 per month, while two-bedroom units have been slashed by about RMB 1,000.”

“Traditionally, June and July are a boon to the rental industry, as roughly 8.74 million students graduate from college and seek housing off-campus. While some insiders are still banking on this annual influx to help the market rebound, others are more skeptical given that many graduates haven’t even returned to the city due to myriad travel restrictions, moratoriums on returning to campuses, and a lack of job prospects.”

“Over the past few months, it’s been difficult not only for landlords and property owners to find tenants, but also for tenants to make rent as the pandemic led to labor shortages, layoffs and reduced salaries. Some landlords responded in kind by lowering rents up to 20 percent, however, not everyone was so lucky and some tenants were simply required to end their contract or default on their payments.”

“Even still, since the Spring Festival holiday – when it became increasingly clear that the coronavirus was going to disrupt every facet of life – landlords have seen an average two-month wait time between listing and leasing their properties, a significantly longer gap than this time last year.”

Related Posts

Ponzi Or Pyramid Scheme?

https://www.youtube.com/watch?v=-P_BpLXSQy0 https://www.youtube.com/watch?v=edbagTAXvLk https://www.youtube.com/watch?v=tdtu9QKXiK0 https://www.youtube.com/watch?v=DFUUIblrgwc https://www.youtube.com/watch?v=N8IzEYRKZ0I

This Post Has 122 Comments

    1. They’re still only cutting price of 800K house 5K. When are they gonna give it away?

  2. Remember the talk about soup lines?

    ‘The food pantry run by the hunger relief organization La Jornada — in Flushing, Queens — started as an aid group for day laborers but expanded its clientele and now serves about 5,000 people each Saturday. Recipients register online for appointments.’

    ‘The group’s executive director, Pedro Rodriguez, said some of his volunteers work 16-hour shifts to meet the demand and avoid having to turn people away.’

    ‘On the first Saturday in March after the lockdown was imposed, Rodriguez was expecting about 1,000 people to show up. But when he opened the doors, a police officer told him the line for food stretched 27 blocks.’

    “To tell thousands of people you don’t have food,” Rodriquez said. “It’s horrible.”

    https://www.latimes.com/world-nation/story/2020-07-17/new-york-city

    1. So New Yorkers, we got no shortage of grub in Arizona. Now you stand around with empty pockets and don’t pay rents and wait for hours for a handout.

      Are you SAFE? Isn’t that all that matters? The CCP virus is gonna get ya! No dignity, no future. You give that all up because the weakest among you scare you. The control freaks demand it. Grow some balls New York.

      1. ‘This week, Governor Andrew Cuomo unveiled a new rental assistance program, which was derided by tenant activists as “cruel” and “terrible.” Within ten minutes of going live on Thursday, the website had crashed, greeting potential applicants with the message: “Too Many Requests”.

        Oh but guberment send me check! What is this dignity you speak of Ben? What is self respect? Didn’t you used to have pride? Now you grovel to have a free roof over your head and stand in line for food. But yer SAFE!

      2. Now you stand around with empty pockets

        Shouldn’t they be their getting $1000 a week? I don’t know what percentage is getting turned down, but I do know people who were self employed who got their $1000 a week.

        I get it that many had to wait weeks to get their free money, but by now they should be flush with cash. I know someone who bought a nice used car with her free money.

      3. “No diginity, no future.”

        The thing that I find so mentally ill about these Control Freaks is just how much they want to turn people into childlike fearful drones waiting for their handouts. They are going to make you safe from the virus, while they attack the Police and want to let the criminals out and let the mob run wild.

        It’s a insult to any self respecting person to have these mentally ill goons be in control. It’s a testimony to how corrupt Big Government can become in that they want a Government for the Government. This is not what this Country was formed to be.
        I have never been so aware of how much a disaster it would be to lose freedom to the power hungry Government .

        1. It’s a testimony to how corrupt Big Government can become

          It’s also a testimony to how corrupt we in aggregate have become. We are now unfit to govern ourselves.

          1. This is what happens when more and more children are raised without Male mentors. Child-brained “adults” devoid of self-responsibility, accountability and a disturbing lack of understanding of the critical importance of ethics, integrity and honor.

          2. We are now unfit to govern ourselves

            I don’t think this is a fair statement, though I get what you’re saying.

            Some of us surely are fit, but sadly those that are happen to be largely outnumbered by those that aren’t, and sadly power is getting consolidated such that it’s near impossible to even create a self-governed area where the adults can take care of themselves.

      5. Just the beginning. Having people standing in line all day for basic supplies is socialists’ most reliable crowd control mechanism and they will use any means necessary to manifest it into reality. Once they have you dependent on them for the means of your survival there is no limit to the depravity to which they will subject you. Once they fully implement the agenda, there is no plague you wouldn’t rather risk than to live in the bottomless pity of desperation, hopelessness, and misery into which they will cast you.

        1. John g,

          I agree with you on how these people would be once they got total control.

          The potential for humans to go into a cult-like form of madness that can justify anything, even murder , is always there. History teaches that, so one of the reasons they want to rewrite history.

          1. Thanks, Wiz. And thanks to Ben for keeping the forum alive. There aren’t many places left on the Internet where you can have an open discussion.

          2. And thanks to Ben for keeping the forum alive. There aren’t many places left on the Internet where you can have an open discussion.

            +1

        2. Having people standing in line all day for basic supplies is socialists’ most reliable crowd control mechanism and they will use any means necessary to manifest it into reality

          Are you suggesting this is consciously desired by some?

          I would never have considered that to be the case…

          2. They are brainwashed into a fantasy on how great Communism would be.

            I have spent hours researching how Commies sell their ideas. Nothing but lies really on how it would work. Like wouldn’t it be nice if everyone could just share the resources and everyone could be truly equal. They sell a idea that people will be able to pursue their passions and hobbies and be truly free. It’s a big lie that it would work that way. The Commies create a enemy they must rise against in order to usher in true Justice for all. They teach them that Communism hasn’t worked in other Countries because they just didn’t do it right.
            They teach that the ends justify the means , racism will end and White People are evil trying to oppress true Justice. All the narratives are false but you always have to have a enemy that must be defeated, as Eric Hopper pointed out in his book THE TRUE BELIEVER.

          3. racism will end and White People are evil

            Haven’t communist revolutions in the past focused on hating a minority?

          4. but you always have to have a enemy that must be defeated

            Orwell understood that very well.

          5. They are brainwashed into a fantasy on how great Communism would be.

            But the biggest problem is when you have crony capitalism as the alternative that becomes a much easier sell. Things like fascism and communism don’t happen in a well functioning honest marketplace where everybody has a shot at success and almost all can make an acceptable living even if they’re not the best and brightest.

        1. Given that we have never been collectively fatter than now, the notion of “food insecurity” seems odd.

          1. collectively fatter than now

            Paying too much for shelter causes all sorts of insecurities.

      1. Don’t you know the crime rate is going up, up, up, up, up
        To live in this town you must be tough, tough, tough, tough, tough!
        You got rats on the West Side
        Bed bugs uptown
        What a mess this town’s in tatters, I’ve been shattered
        My brain’s been battered, splattered all over Manhattan

        Sha oobie, shattered, shattered, what say
        Sha oobie, shattered
        Sha oobie, shattered
        Sha oobie, shattered

        Uh-huh, this town’s full of money grabbers
        Go ahead, bite the Big Apple, don’t mind the maggots, huh

        https://genius.com/The-rolling-stones-shattered-lyrics

        1. Interesting how the Left run cities never cared about the health crisis that was building up due to the homeless shitting everywhere, rat population out of control, needles on the street and all the filthy trash. Increase in crime by the homeless .

          And I’m suppose to trust these Government Cultist that have weird solutions for any problem.

          When you have a corrupted Government welfare State that somehow gains political power by actually not solving problems than it’s reached the point of max corruption.
          I think tax payers are wondering why they are being invaded and harmed by groups who are destroying civil society.
          I found out that the homeless the Gov. put in hotel rooms have been destroying those rooms in every way.
          It seems like a lot of the mob Looters were joined by the chronic homeless also.1

  4. By late last year, about 96% of China’s urban households owned at least one home,

    And 96% of those are probably airboxes. Not a blade of grass.

    1. MT boxes, MT houses, MT lots…. All require an MT skull which leads to MT pockets.

      Housing prices are cratering.

      San Ramon, CA Housing Prices Crater 15% YOY As Bay Area Housing Market Turns Toxic On Rampant Appraisal Fraud

      https://www.zillow.com/san-ramon-ca-94582/home-values/

      *Select price from dropdown menu on first chart

      As a noted economist stated, “If you have to borrow for 15 or 30 years, you can’t afford it nor is it affordable.”

    2. “By late last year, about 96% of China’s urban households owned at least one home,”

      “Owned”: I do not think that word is an accurate one. I know that word is used a lot but it does not properly describe the situation.

      1. Renting from the bank at twice the monthly market rate for decades is the best definition of owning…. A DebtDonkey.

        Now housing prices are cratering.

        Los Angeles, CA Housing Prices Crater 14% YOY As Mortgage Defaults Accelerate

        https://www.zillow.com/los-angeles-ca-90015/home-values/

        *Select price from dropdown menu on first chart

        As a noted economist stated so eloquently, “A house is a rapidly depreciating asset that empties your wallet it every day you own it.”

        1. “Renting from the bank at twice the monthly market rate for decades is the best definition of owning…. A DebtDonkey.”

          Its amazing how many people never think about this while they sign themselves up for a lifetime of debt…..

          1. Its amazing how many people never think about this while they sign themselves up for a lifetime of debt…..

            Especially since the days of a long career at the same workplace location are, for all intents and purposes, gone. Anchoring yourself to some overpriced albatross that limits your earnings potential is a fool’s errand.

    3. And 96% of those are probably airboxes. Not a blade of grass.

      Many years ago I was on a biz trip to Barcelona. I asked one of my local colleagues how much a “casa” cost. He rattled of a number. I asked how big the yard was. His eyes widened when he understood I wasn’t talking about flats. He laughed and said he had no idea, because only very rich people could afford a house with a yard, and that he would never have one.

    2. I wouldn’t say “lying” just yet, but I would love to hear Dr. Fauci address some of this instead of flip flopping on masks.

      Peak Prosperity covered this paper a few days ago. Chris at PP has this notion that anyone who’s had a coronavirus common cold* in the past 10 years already might have T-cell memory cross immunity and therefore had no symptoms. Therefore all we need to do for immunity is induce a coronavirus common cold — very much like cowpox is the vaccine for smallpox. That sounds too good to be true, so I’m skeptical.

      Questions to ponder:
      If people who recovered from COVID have immunity, then why are people being reinfected?
      If somebody took my blood today, would they find measles antibodies? I honestly don’t know.
      How would one test for T-cell immunity memory, other than throw the virus at it?
      And where is this T-cell immunity hiding? Everywhere in the blood, or just a few cells? If someone takes a blood draw, could they take the wrong few millilitres and “miss” the memory T-cells?
      We just don’t know yet.

      ——————-
      *Most common colds are caused by a family of 200+ rhinoviruses, and only a few colds are caused by four(?) coronaviruses. So it’s not enough to just have a cold, you’d need the specific cold from a coronavirus.

      2. T-cells come in several different types, including killer T-cells, helper T-cells and memory T-cells. Then there are B-cells — another essential category of white blood cell. Among other roles B-cells are the immune system’s antibody factories.

        Al Edwards, associate professor at Reading University’s School of Pharmacy, offers an analogy. “T-cells are tasting the virus whereas the antibodies are feeling the virus,” he said. “T-cells can promote antibody responses and antibody responses can promote a T-cell response. These two systems work together.” 

        “Even if you’re left with no detectable circulating antibodies, that doesn’t necessarily mean you have no protective immunity, because you are likely to have memory immune cells (B and T cells) that can rapidly kick into action to start up a new immune response if you re-encounter the virus,” added Prof Maini of UCL. “So you might well get a milder infection.”

        2. You mean we have a highly evolved immune system to handle these kind of things? Who woulda thunk.

      3. Don’t think people are being reinfected. Dead virus cells that linger are making tests show positive. At least that’s how one Expert explained it.

        1. It’s not just positive testing. These people are having more than one round of tell-tale symptoms. The common theme is that they get better and re-lapse about a month later. I’m not sure they’re going through a new infection, or if the old one is flaring up again. We don’t yet, because the epidemic is so young. We know it takes ~3 months for antibodies to fade, so these relapses were people who got COVID early, Feb/March, are are just getting it again now. Would they get it again in six months? We don’t know, we haven’t even gone six months yet.

          Either way, these reinfections and so-called “long-haulers” are the ones who should be insisting on the full cocktail of drugs: HCQ and Ivermectin and zinc and D and C and steroids. The body just can’t seem it clear it by itself.

          1. ‘The body just can’t seem it clear it by itself’

            Most people infected with coronavirus never show symptoms
            http://www.telegraph.co.uk › news › 2020/05/28 ›
            May 28, 2020 – The vast majority of people who contract coronavirus never show any symptoms, the first analysis of antibody tests by the Office for National …

          2. I think I remember in my lifetime when I caught a cold and than it kinda reasserted itself . Is that reinfection or is that the body not getting the sneaky virus killed enough when it first
            entered.

            Look, the Authority has lost all credibility with me when they allowed the mob protesters to go against the health mandates.

          3. These people are having more than one round of tell-tale symptoms. The common theme is that they get better and re-lapse about a month later

            Oxide, I’m not a doubter of this per se, but curious given your ongoing concern on this issue.

            Do you know anyone who’s gotten COVID? Do you know anyone who’s had all the bad symptoms you’re afraid of? How about anyone who’s had it and “relapsed”?

            Genuinely curious (I directly know two people who have had COVID, but that’s all)

          4. One of my co-workers had it. She was never tested, but her husband tested positive and she caught it from him. She had the cough and trouble breathing for about 4 weeks, with steady improvement, no relapse that I know of.

            I don’t know long-haulers or relapsers personally. They seem to be very very few of them, maybe a thousand worldwide. But it’s still enough to keep me home.

          5. But it’s still enough

            Try to asses your actual risk. Sounds like it’s one in a million.

        1. Thanks, I’ll read it. I’m posting this stuff not just for me, but for others. It doesn’t seem like it, but progress is being made very quickly. The cross-immunity and T-cell immunity is very promising. It’s an indication that a one-and-done vaccine is possible, or least one that lasts more than six months.

          1. The cross-immunity and T-cell immunity is very promising.

            Wouldn’t it be amazing if scientists discovered that the body has an immune system that allows almost everyone to fight off this virus if they are healthy and not riding a motorcycle.

      5. then why are people being reinfected?

        Coronavirus: Why everyone was wrong

        So if we do a PCR corona test on an immune person, it is not a virus that is detected, but a small shattered part of the viral genome. The test comes back positive for as long as there are tiny shattered parts of the virus left. Correct: Even if the infectious viruses are long dead, a corona test can come back positive, because the PCR method multiplies even a tiny fraction of the viral genetic material enough [to be detected]. That’s exactly what happened, when there was the global news, even shared by the WHO, that 200 Koreans who already went through Covid-19 were infected a second time and that there was therefore probably no immunity against this virus. The explanation of what really happened and an apology came only later, when it was clear that the immune Koreans were perfectly healthy and only had a short battle with the virus. The crux was that the virus debris registered with the overly sensitive test and therefore came back as “positive”. It is likely that a large number of the daily reported infection numbers are purely due to viral debris. (emphasis original)

        would they find measles antibodies?

        Not unless you were recently exposed to it.

    3. Appreciate that article from the Swiss immunologist. I’ve forwarded it to a number of people.

  8. ‘The Board of Directors of the Ocean Beach Town Council has sent Councilwoman Jen Campbell an open letter criticizing the City’s failure to protect beach neighborhoods from short-term vacation rentals, and asks her to stop “excluding beach area constituents” from the conversations on them.’

    ‘The Board also invited Campbell and other members of the deal concocted between her and the union, Unite HERE and Expedia, one of the largest international short-term vacation rental platforms to attend the next OBTC public meeting to “tell us more about how you intend to enact this proposal.” The meeting takes place July 22 at 7pm.’

    ‘Here’s the full letter from the Town Council, dated July 15, 2020: Over the past five years the OBTC has hosted numerous public meetings gathering community input regarding the vexing problem of illegal short-term vacation rentals. This has been going on, unchecked and unenforced in sections of our neighborhood zoned for residential use only.’

    ‘The inability of America’s finest city to enforce its own municipal code, instead allowing the problem to continue for so many years is absurd and raises many troubling questions about the access and influence that short-term operators, platforms, and their lobbies have had on our local elected leaders.’

    ‘The City of San Diego, under the leadership of the Mayor’s office, has audaciously refused to enforce the existing code as interpreted by our own City Attorney. This demonstrable lack of leadership has resulted in a de-facto rezoning of our residential neighborhoods, and the proliferation of scofflaw property owners taking advantage of the lack of enforcement to convert residential units into unregulated hotel operations.’

    https://obrag.org/2020/07/ocean-beach-town-council-asks-jen-campbell-to-stop-excluding-beach-residents-from-debate-on-short-term-vacation-rentals/

    A comment:

    ‘Jen Campbell is a gigantic disappointment to us. I believe that she
    intentionally lied to us, when she campaigned for office. We have
    not gotten what we voted for. We must vote her out as soon as
    possible.’

    1. Jen Campbell is a liar who needs to be voted out of office. STRs is one thing. She is also spearheading an effort to overturn a 30 foot height limit west of the I-5. And she refuses to acknowlege, let alone discipline our “smart street lights” program that is a police run surveillance program.
      San Diego has HORRIBLE government.
      I’ve lived here 40 years and I’m leaving!

  9. ‘Residents in Los Angeles who have been financially impacted by the coronavirus pandemic have until midnight to apply for assistance paying their rent. Applications for the Los Angeles Emergency Renters Assistance Subsidy Program will be accepted online until 11:59 p.m.’

    ‘The program is open to all renters, regardless of immigration status, and will provide a grant up to $1,000 per month, with a maximum grant of $2,000 per household. The subsidy will be paid directly to the tenant’s landlord on behalf of the tenant.’

    ‘The Housing and Community Investment Department of Los Angeles said it had received more than 180,000 applications for the program since the application window opened Monday. However, there is only enough funding to assist 50,000 households.’

    ‘Applicants who receive the subsidy will be selected randomly and must meet the following criteria.’

    https://losangeles.cbslocal.com/2020/07/17/today-last-day-apply-renters-assistance-los-angeles/

    On yer knees California. Beg for help.

  11. Ah yes, those chicoms are following the same path to folly that the Japanese did in the 1980s with real estate! Remember that? Crashed and burn. I am waiting for the inventory issues to resolve and housing prices to tank. BUT as long as the FED keeps inflating asset bubbles, looks like prices are high and few homes on the market.

    1. I remember reading the best seller “Yen” in 1989 and I was convinced that we would all be speaking Nihon-go very shortly. I was living on Guam at the time and right before I left in late 1990, I noticed that the bus loads of Japaneses golf tourists were starting to disappear. When I went to Tokyo on business in 1999 many of the execs I talked to told me that many people were still suffering from the Japan RE bust. Ganbatte!

        1. https://en.wikipedia.org/wiki/Plaza_Accord

          The Plaza Accord was a joint-agreement, signed on 22 September 1985, at the Plaza Hotel in New York City, between France, West Germany, Japan, the United States, and the United Kingdom, to depreciate the U.S. dollar in relation to the Japanese yen and German Deutsche mark by intervening in currency markets. The U.S. dollar depreciated significantly from the time of the agreement until it was replaced by the Louvre Accord in 1987.

          2. The plaza accord! I was in the army in germany then. People were lining up at the banks to get Marks because the exchange rate went from about 3.2 to to 2.7 marks/dollar in one day. It was a significant financial event.

        2. https://en.wikipedia.org/wiki/Louvre_Accord

          The Louvre Accord (formally, the Statement of the G6 Finance Ministers and Central Bank Governors) was an agreement, signed on February 22, 1987, in Paris, that aimed to stabilize international currency markets and halt the continued decline of the US dollar after 1985 following the Plaza Accord.

        3. So these pukes can get together and agree on an accord and hence can make or break economies as they so choose.

          I like it.

  12. Loomis, CA Housing Prices Crater 32% YOY As Sacramento Area Construction Costs Slip Under $50 Per Square Foot

    https://www.movoto.com/loomis-ca/market-trends/

    As one Sacramento broker shared, “The cost to rent a house is half the monthly cost of buying it but that’s something we just don’t discuss openly.”

  13. “About 21% of homes in urban China were vacant in 2017—a very high proportion relative to international standards—which equated to 65 million empty units, according to the most recent data from China Household Finance Survey.”

    Is that a lot?

  14. China Bank Collapse Rumors Spark Bank Runs

    By NTD Television
    July 17, 2020

    ‘Rumors of Chinese banks collapsing are flooding social media in China. Worried customers have descended on several banks to withdraw their money. Police took people into custody, accusing them of spreading rumors. Half of China’s important agricultural provinces have been impacted by the biggest flooding in decades.’

    ‘Part of the plaque at the entrance to Wuhan’s City Hall is missing. One woman reportedly cut it off with an ax. With the virus cover-up, flooding, and less support from authorities, dissatisfaction in Wuhan is rising.’

    ‘Beijing said on Friday any travel ban against Communist Party members would mean Washington stands against the entire Chinese population. But Chinese people took to social media to say they actually welcome the ban.’

    https://www.theepochtimes.com/china-in-focus-china-bank-collapse-rumors-spark-bank-runs_3428518.html

    1. ‘Beijing said on Friday any travel ban against Communist Party members would mean Washington stands against the entire Chinese population.

      What’s the sense in banning travel by CCP members, when their ideological fellow travelers, the Democrats, are allowed to wander freely into the red states?

    2. https://www.bloomberg.com/news/articles/2020-07-14/spate-of-china-bank-runs-force-police-regulators-to-act?sref=5CqwjcI3

      Social media-fueled rumors about banks collapsing are popping up at an unprecedented frequency in China, forcing regulators and even the police to step in to calm depositors.

      Just since the past month, worried savers have descended on three banks to withdraw funds amid rumors of cash shortages that were later dismissed as false. Over the weekend customers rushed to a bank in the northern Hebei province to take out money, prompting local regulators to publicly vouch for the soundness of its lenders as the police halted the run.

      Confidence in the $43 trillion banking system is eroding among the nation’s more than 1 billion account holders, threatening a cornerstone of China’s rise into an economic powerhouse. After several bailouts and the first bank seizure in more than two decades last year, the coronavirus outbreak and its economic fallout have exacerbated an already shaky situation in the world’s largest banking system.

  15. Claims his predictions on housing have been near “perfect” as documented for all to see in his podcasts the last few years. (this one is24 minutes)

    Uses 2 examples using the same house on whether to buy now or a year or so from now is the best choice. His choice won’t be much of a surprise for people reading this blog. Uses latest data, as this video is only a day old right now. My guess is that the magnitude of the downside will surprise him. Worth a watch.

    https://www.youtube.com/watch?v=Wub3TNDDJiM

  16. As long as housing prices continue cratering, all is well.

    Bronxville, NY Housing Prices Crater 12% YOY As Westchester County And Metro NY Housing Prices Drop Like A Rock

    https://www.zillow.com/bronxville-ny/home-values/

    *Select price from dropdown menu on first chart

    As a national broker shared, “We’ve been scamming buyers for years.”

  17. Hello everyone,
    I hope you’re all staying well and healthy!

    A weekend topic starting with the Wall Street Journal “‘Property has hijacked China’s economy, so the government wouldn’t dare to push for a plunge in housing prices, even if that’s the most effective way to deflate the bubble,’ said Chen Zhiyu, who works for an American retailer and is looking to purchase a property in Shenzhen. ‘You gotta follow the money.’”

    – “Property has hijacked China’s economy,…” This is a global phenomenon. I would call it a crowded trade, with mean reversion as ultimate outcome. Central banks are still in boost phase, but not sustainable. Debt saturation will limit growth and price appreciation by both the State and the debt slaves. Houses aren’t going to “infinity and beyond,” just as “trees don’t grow to the sky.” Are we there yet?

    “Sales activity is also being driven by cash-strapped developers and the local governments that sell them land. Both need to gin up revenue to pay down debts or offset other problems, and are cooking up more incentives to move properties.”

    – There are many pigs feeding at the trough of real estate. As a reminder, pigs get slaughtered, but for now apparently, pigs can fly.

    “Pigs can fly if shot out of a large enough canon; until they come down to earth as bacon.” – Harley Bassman

    “Rental yields—the proportion of a property’s value made annually by renting it out—are below 2% in major cities like Beijing, Shanghai, Shenzhen and Chengdu, less than can be made buying Chinese government bonds.”

    – Rental yield = cap. rate. A 2% cap. rate means that your “investment” is a seriously money-losing proposition. I wouldn’t even consider something at less than 7%.

    “Average home prices across China reached 9.3 times average income in 2018, according to the Chinese Academy of Social Sciences, compared with 8.4 in San Francisco.”

    – The long-term historical median house price to median income ratio is approx. 3x. China is at 9.3x, and so 3x what would be considered a sane ratio. Insanity.

    “In essence, urban Chinese have bet everything on their homes. They now have nearly 78% of their wealth tied up in residential property, versus 35% in the U.S. ‘While local governments are under pressure to prevent further surges in housing prices, what scares them more is a sharp decline,’ said Gao Fei, general manager at real-estate firm Centaline Group in Tianjin. They can ill afford to let the market go down. Income from land sales and related taxes on developers accounted for 52.9% of local governments’ revenue in 2019, a record high.”

    – Betting on houses = speculation, resulting in ginormous property bubble. Mean reversion is going to be a bitch.

    “Yin Haiping, who runs a property consulting firm in Shenzhen, said fear of losing out [FOLO=FOMO] is driving more buyers to look now, with home prices in some desirable areas up by at least 10% this year.”

    – FOLO=FOMO. Now that’s a sound investment strategy. /s Not to mention that stripping off the glitzy facade of property ownership, reveals that it’s just an illiquid asset with high long-term carrying costs. Many are still wearing their rose-colored glasses.

  18. You got some pretty big Corporations donating to BLM right now.
    In summary Victor Hansen was saying it was most likely to keep them from being boycotted by tem.
    Some of the Companies are,

    Bank of America, NFL, Walmart, Comcast, there is more

    Victor Hansen went on to make the point that they are also protecting their emerging market customer base in China and other Countries.

    So ,I’m going to boycott any Company that donates to a Commie group like BLM that’s creating havoc like they are.
    Screw Walmart , who wants their cheap Chinese shit anyway. I love football but who needs it if China is more important to them.

    1. I love football but who needs it if China is more important to them.

      I have a hard time believing that anyone in China gives a Crab Rangoon about the NFL.

    2. “I love football but who needs it ”

      I’m out. Colts fan since Unitas, watched the Packers win the first Super Bowl in 1967 (I was 7) sitting next to my Dad who would tell me to “watch the guards, they’ll tell you where the play is going”. Watched every Super Bowl and most playoff games since. Regular season viewer when I wasn’t playing in high school or college (not enough time).

      I will watch college, if they start this sh#t I’ll watch high school football, they take a knee I’ll watch Rugby.

      I’m taking my money for the DirecTV NFL Sunday Ticket and they can take their league, a knee, the Washington National Football League team, their Black national anthem and shove it where it will never see the light of Social Justice.

      1. I’m out.

        Same here. There was an article somewhere that asked for name suggestions for the Redskins. I responded with the “Washington Kneelers.”

        1. I responded with the “Washington Kneelers.”
          I have many ideas for that:
          “Washington Rentseekers”
          “Washington Oligarchs”
          “Washington Globalists”
          “Washington Elite”
          “Washington Swampers”

      2. I lost track of football when Peyton Manning retired… well actually before that, when he had all those frightening neck surgeries. I was afraid to watch. After that it’s been a blur of contracts, concussions, and commercials. They couldn’t go 20 seconds without advertising something somehow. They lost me even before the kneeling.

  19. pfft they just cant keep the inventory filled in SW FL with multi million dollar homes
    sellin like hot cakes…..
    https://www.sarasotamagazine.com/home-and-real-estate/2020/07/a-longboat-key-estate-breaks-sale-record-at-13-million-and-one-dollar?utm_campaign=Newsletter%20-%20SAR%20On%20the%20Market&utm_medium=email&_hsmi=91591677&_hsenc=p2ANqtz-9_F90dYrdlyiFDXHrKhmhvMqqCGc9qUvjoKqus3RrAaBcMhzT0Gx2-ZS5kC5trd1NS8qCTAMQN0MyRyU8bBxU26k7frw&utm_content=91591677&utm_source=hs_email

  20. Checking in with the HBB crew thread starter – haven’t had much time for posting lately.

    Utterly gorgeous summer day here, and it has me feeling great while working on and around Casa Spiffy.

    Swedish Death Cleaning / turning stuff I don’t need back into money continues on towards an ambitious end of summer goal while listening to the Muppets version of Act 1 of Hamilton today. Less stuff == better/happier;

    Generally, things have been very good for the Spiffy’s except for Mrs. Spiffy’s frozen shoulder – Looks like we’re headed towards surgery (pending results of next week’s tracking-die MRI)

    How is everyone else doing? RR, any progress on the sale/purchase/1031?

    1. Good to see you’re doing well. It seems everyone is on the decluttering kick. Early spring in quarantine will do that to people. Cars are snaked around thrift store parking lots to drop off donations. I did some decluttering too. I got rid of four crates of books, only to buy once crate of books in case there’s a second wave.

      1. The Encinitas house went on the market 7/10/2020. As for the 1031 exchange, it looks like I’ll need to take a loan from the irrevocable trust, buy a new property with a relatively small loan in our name, then repay the loan to the trust with the deed to the new house. Whether it ends up as a 1031 exchange who knows. The tax implications are less than previously thought. I had the loan as an asset rather than a liability in my calculations. There isn’t anything in Poway of interest at this time either.

      2. Cars are snaked around thrift store parking lots to drop off donations

        I had just assumed they weren’t open for donations due to COVID..Guess I should check that assumption and clear out some room!

        I’ve been selling what I can on craigslist, just clearing things out at $5 to avoid flippers and ensure it goes to someone who will use it. Working pretty well so far.

        1. Re-opening is very specific depending on the county or even on the business. Check the websites. Even when thrift stores were closed for during lockdown, some kept a curbside donation open — just pull up and pop your trunk.

    2. I had a frozen shoulder a few years ago. Couldn’t do any upper body exercise. Painful to take something off the high shelf. After almost one year it just went away. It’s like new.

    2. Kidnapping? How much ransom are they asking for? Seems like hype and distortion to me. Night attacks like happened in Argentina just before the Falklands war are things to be concerned about, but not this. As i understand it, most if not all were released without charges after they got to the courthouse. I don’t think Vice.com is reliable, but then each to his own.

      The article claims they were “camouflaged”, but not according to the guy in the link below. He claims the FEDs were wearing badges. I’m not a big fan of Tim Pool because he’s on the left, but he does try to verify any news he puts out. If you don’t have much time you can skip to the 7:45 mark and watch for a few minutes.

      https://www.youtube.com/watch?v=Qtddg2KVV-o

      1. hype and distortion

        Plenty of that going around every day. You have to pause and think for a second. A guy in full desert camo with gear on the street in a protest ravaged city speaks military. If they were undercover they would wear something less conspicuous.

        Isn’t it silly to say Feds are invading if they are on State soil? Is this a rerun of 1860? Maybe Oregon should start flying the Confederate flag.

        1. If they were undercover they would wear something less conspicuous.

          Yes, from the article, until i saw the pictures, i was imagining suits. Brown, not black.

      2. Tim Pool is left? My understanding is that he visited the no-go immigrant sections of Malmo, Sweden, at the invitation of Paul Joseph Watson. That’s hardly liberal. Maybe Pool is on the fence, which is a good place for a journalist to be.

        1. Tim Pool is left?

          Tim Pool is moving to the right, but he’s still a little left of center. He’s one of the slowest red-pillers i’ve ever seen. That pill is going down painfully slow. He often contradicts himself in the same video. He isn’t terribly bright, but he is very honest. At least he does his best to be.

          I stopped listening to him for a while because of the idiotic leftist things he used to say, but it was very hard to find out what was really happening out there without also hearing the lies of the left from the MSM. So i had to start watching his podcasts again to get news. Naturally, his comments/opinions are biased, but his reporting of the news isn’t. It is entertaining though, to watch him have to grudgingly move to the right.

          1. Watching Leo Terrell, a prominent Democrat and civil rights attorney, #WalkAway has been interesting.

          2. Watching Leo Terrell, a prominent Democrat and civil rights attorney, #WalkAway has been interesting.

            Yes, but the younger ones like Tim are the most important. They will be active conservative the longest.

            Another one i’ve watched is Carl Benjamin or “Sargon of Akkad”. He started out as a member of the Young Turks. That’s how far left he was. I commented on one of his early Youtube videos that he was too smart to remain a liberal and that he’d become a conservative in the coming years. It was a slow start but he’s really picked up steam in the last couple years.

            He absolutely obliterated lefty Thomas Smith in a debate years ago. Nearly had him in tears. Towards the end Smith got up and stomped out. It was that debate that gained him a huge following and he was still very much a lefty back then. You might still be able to find it on Youtube if they haven’t taken it down yet. I think you’d enjoy it.

    3. “even less a fan of” set ofs my cognitive dissonance alarm which has served me well most of my life. News media exists to rile up their readers, trigger their primitive reflexes & deflect their thinking processes. It’s working quite well.
      Looking at this at a different angle: https://www.kgw.com/article/news/crime/big-july-spike-in-gun-violence-causes-fear-injury-and-death/283-9360befd-403f-48ba-800f-3709fa80f1d6
      Cognitive dissonance aplenty in that record.

  23. Hi bubble folks,

    I ran a check of rent vs buy based on my current $1400 month rent for a 1 bedroom versus a $385k home/condo in Sacramento and buying is more expensive until year 15. So I’d have to own for 20+ years to save money. Finding a home under that price is near impossible right now with record low inventory, low interest rates, mortgage bailouts and sky high real estate prices. So I wait on the sidelines. I used the free realtor.com tool to run the comparison.

    1. A $300k house is horrifically expensive for most people, unaffordable for median incomes in almost every area in the US.

      1. A $300k house is horrifically expensive for most people

        So is $1400 in rent. Yet we have been collectively conditioned into accepting that housing is supposed to be utterly unaffordable.

    2. Did you factor condo fees into your calculation? That alone tips the scales towards renting in CA, likely indefinitely. I’m an eastern girl; I do not understand the attraction of California. So I usually tell people just to forget about buying in CA altogether.

      1. So I usually tell people just to forget about buying in CA altogether. I have been telling my peeps to forget about buying anything very expensive for the foreseeable future. The road ahead is most uncertain.

      2. I’m an eastern girl; I do not understand the attraction of California.

        No snow and mostly mild weather. Beyond that the Leftists that run the state have managed to destroy all the other positives.

          1. SoCal is a lot balmier and less cloudy and rainy than the PNW.

            Before it became over populated and leftist, California was a very nice place to live.

        2. “Beyond that the Leftists that run the state have managed to destroy all the other positives.”

          Oregon and Washington are both liberal enclaves too.

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