China's failure to rebound after last year's post-Covid reopening has become one of the most disappointing economic stories of 2023. Expectations are growing that it could take a year—or a decade—to fix the property-sector troubles that are dragging on growth.
What happens if China housing bubble bursts?
Grows out of control and bursts, it will hit hard real estate developers, housing owners, housing speculators, the banks and financial sectors, as well as the construction and building materials sectors in China. Housing owners and developers will find their assets depreciating rapidly.
Why is it so hard for China to fix its real estate crisis?
But the problem is that housing prices also need to fall to the point that buyers see real estate as a good investment again. And in China, local governments really don't like falling prices that threaten to undermine investor confidence and social stability.
What is the cause of the Chinese real estate crisis?
Because home prices had always gone up, people began to believe they always would. That led to more and more Chinese buying homes as a way of investing their savings rather than to live in. Rising home prices caused another problem by widening the wealth gap between those who owned property and those who didn't.
How bad is China's property crisis?
The RBA warned that problems stemming from the "sharp deterioration" in China's property sector — which accounts for about 30 per cent of the nation's economic growth — could lead to a global slowdown, weaker commodity prices and "reduced Chinese imports of Australian goods and services".
Is the U.S. banning Chinese from buying property?
The Florida laws bans people “domiciled” in China who don't have U.S. citizenship or permanent residency from owning property in Florida. The law doesn't apply to her, Tang acknowledges, since she is a U.S. citizen. But it could still impact anyone Asian, she said.