China’s property market is in freefall. What does this mean for the world economy? | Keyu Jin

repay their debts

The short-term pressure on the Chinese economy is real, but China is not about to experience a severe housing crisis. For one, Chinese households, which should allow them to address interest payments relatively easily. This is not a situation like in the US or Europe in 2008, which saw highly indebted homeowners unable to make their basic payments.

What we are seeing today is already the third major property market cycle in the last 10 years. The state has its reasons to intervene: winning the hearts of the middle class starts with providing them with more affordable housing. An overheated sector also poses a threat to financial stability. In the past, profligate real estate companies have expanded into areas unrelated to property, while many other businesses turned to investing in property rather than focusing on their core operations.

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China’s property market is ‘imploding’China’s property market is “imploding”, Judo Bank Economic Advisor Warren Hogan says. China recently announced it would be cutting its key interest rates at a time when most of the world is lifting theirs in response to growing inflation. “It’s a very complex web of financial interactions,” Mr Hogan told Sky News Business Editor Ross Greenwood. “Developers are in trouble; financiers are in trouble and of course what I think … worries for the government is there is a lot of savings wrapped up in that market so they are trying to really take some pressure off that property market and of course take some pressure off the broader economy.” Good 🧐🤔Cottage Cheese construction. They literally have built entire cities without a single person living in them 5,10,15, 20 years later.
Source: SkyNewsAust - 🏆 7. / 78 Read more »