China real estate crisis: Buy a house and get a gold bar! No Bitcoin unf!

[franky1]

the whole real estate market/mortgage deals is a shambles of creativity

person sees a house price of say $200k.. but actually pays $260k(mortgage interest) effectively at the end
so the price is false

then the house is only actually worth $160k because the purchase is realistically for a $160k house+ $40k gold bar
so the price is false

a $160k house costing the person $260k but they get a gold bar from government whilst the banks pocket $100k profit
in the UK however the government dont give the house buyer a gold bar. instead they pay the home builders the equivalent of more then $40k gold bar to build "first time buyers" homes on the cheap, where by usually developers build smaller homes on smaller plots of land using cheaper material but price it at a rate equivalent to a normal homes superior materials. thus the developers pocket the profits

[Darker45]

the whole real estate market/mortgage deals is a shambles of creativity

person sees a house price of say $200k.. but actually pays $260k(mortgage interest) effectively at the end
so the price is false

then the house is only actually worth $160k because the purchase is realistically for a $160k house+ $40k gold bar
so the price is false

a $160k house costing the person $260k but they get a gold bar from government whilst the banks pocket $100k profit
in the UK however the government dont give the house buyer a gold bar. instead they pay the home builders the equivalent of more then $40k gold bar to build "first time buyers" homes on the cheap, where by usually developers build smaller homes on smaller plots of land using cheaper material but price it at a rate equivalent to a normal homes superior materials. thus the developers pocket the profits

I wonder why there needs to be a gold bar giveaway. Why can't they just give 20% discount? That's the equivalent of the value of the gold given away. If sales are poor, does the gold bar entice buyers? I don't think so. They can buy that gold anyway if they need it. If they don't, then they're forced to buy gold, which they don't need at all, by buying a house. A cheaper price attracts buyers more.

China has an oversupply of residential buildings that they are left with no choice but to destroy some of them, many unfinished. Ghost towns are built within high-rise compounds. Real estate companies went bankrupt. The prices of houses remain high though.

I'd rather live in a tiny house built on a small plot of land than in a poorly-built high-rise structure using substandard materials. Unfortunately, people in China can't privately own pieces of land that they're forced to live in buildings that may collapse anytime.

[lizarder]

But more importantly, the seller can just say it's a worthless Bitcoin voucher code, it doesn't affect the price at all and besides, it's almost impossible to check if the voucher has changed owners. If I sell you a house and gift you 100 Pokemon cards I doubt pretty much someone will come to appraise it. Now that I think twice about this I'm really calling for tax evasion here  

So, do we have a potential usage scenario or I'm grasping at straws in a turd market full of bear dumps?  

I don't know the details of that but if you look at the Chinese government which is not friendly to bitcoin, they will definitely do everything they can to limit it. Why would a program like this come up because they are very concerned and the lack of checking details that the voucher has changed hands is a form of cover up for the public that they are intentionally creating. If I'm not mistaken!!

Always be prepared and I believe this is a scenario because if you look at China they are always very against anything that could potentially break the rules. Because if the gold bars have physical we might be able to detect it and that's not an ideal scenario for them to do.

[franky1]

the whole real estate market/mortgage deals is a shambles of creativity

person sees a house price of say $200k.. but actually pays $260k(mortgage interest) effectively at the end
so the price is false

I wonder why there needs to be a gold bar giveaway. Why can't they just give 20% discount? That's the equivalent of the value of the gold given away.

its to keep the market comps at a certain rate

if they dropped an average house price from $200 to $160. thats a 20% down market. meaning it hits the stats about CPI and inflation rate and other measures. they cant and dont want to cause a market crash based on trying to sell a bunch of empty homes which then impact on the market of already filled/occupied homes
so by giving them a gold bar from government as a "back hander" gratuity.. the sale of a $200k house is market off at the market rate of $200k not $160k.. the banks get paid $40k from the government to buy the gold from banks. and later the bank collects $60k of interest from the home buyer so the banks also profit $100k in the deal

its the same at the other end. why do banks prefer people to mortgage a house instead of pay in full (as with credit lines with other produce) its because if they can sell a product at $200 but it actually cost the person $260 years later.. the person then wont sell it for less than $260 years later to break even.. thus cause the markets to show "growth" by having the markets move forward instead of backward
(30% over 15 years is a 2% inflation rate on houses)

[kryptqnick]

The article on the Guardian and the start of the discussion is from a year ago, so that's not news. Is that still going on, or why has it resurfaced on the forum? It looks like the issue with the property crisis is still relevant, but China is employing new strategies, such as asking local governments to buy unsold houses, and then transform them into affordable housing options. So far, the attempts to rescue the real estate market haven't been successful (and that includes the gold bars measures). I don't think replacing gold with BTC would've made a difference, but this new policy is quite different, and we'll see if it works.

[stompix]

The article on the Guardian and the start of the discussion is from a year ago, so that's not news. Is that still going on, or why has it resurfaced on the forum? It looks like the issue with the property crisis is still relevant, but China is employing new strategies, such as asking local governments to buy unsold houses, and then transform them into affordable housing options. So far, the attempts to rescue the real estate market haven't been successful (and that includes the gold bars measures). I don't think replacing gold with BTC would've made a difference, but this new policy is quite different, and we'll see if it works.

Still going on, prices are collapsing as much as the government is letting them go down
https://www.reuters.com/world/china/china-june-new-home-prices-fall-fastest-pace-9-years-2024-07-15/

They are slowly out of options, they've lifted all restrictions, construction has slowed down, and yet demand is not there.
This comes from a paper that is basically the Chinese version of russia today:
https://www.scmp.com/business/china-business/article/3259078/china-property-beijing-needs-us21-trillion-revive-sector-rescue-plans-have-not-been-good-enough
if they acknowledge 2 trillion is needed to help the sector how much worse can it?


 

[ancafe]

The world just keeps giving, after my previous topic about paying your debts with monkeys we go to the next funny one, new home gold bar gifts!

Yup sadly, it's gold, not Bitcoin, not even Dogecoin or a 2 by 2 pixels NFT!
And maybe it's even worse than that since gold can't be checked by a decentralized network for authenticity evey time, it might be something like this:

If this happens in my country, it is certain that it will develop quite a lot because it is in line with the understanding of the ancients about gold as one of the most promising investments. By buying a house, they will also get gold so that in one hit they can get two benefits at once, although sometimes the terms and conditions definitely apply. The only thing I think this can be manipulated is because most people have difficulty recognizing real gold, especially when faced with ordinary rural communities. It could be that the amount will be limited and in the future the gold will not be enough to be given as a gift when people there are competing to buy a house.

Is it possible that this is a hatred of bitcoin in particular or crypto in general because there is no reason that is much more profitable to buy a house given gold to buyers. Of course we see the Chinese government still firmly prohibiting crypto and they are trying to do something to prevent it. Although we don't really know how the government there is, if we follow it on various channels or news, they are quite authoritarian in controlling their people. Am I wrong?

[stompix]

Revisiting this topic
https://www.scmp.com/business/china-business/article/3278518/chinas-august-home-prices-drop-fastest-pace-9-years-small-cities-bear-brunt

The prices of new homes fell for the 15th consecutive month, dropping 5.7 per cent across 70 cities on the mainland from a year earlier, marking the biggest monthly slump since May 2015. The decline widened from the 5.3 per cent drop in July, according to SCMP’s calculations based on data released by the National Bureau of Statistics on Saturday.

At the same time Fitch has downgraded Vanke one of the largest real estate still unaffected from the trio to BB-, 180 billion in liabilities, at the same time China has offered 300 billion to date to help home sales, relaxing policies in some cities for second homes and despite that prices keep going down even in Beijing and Shenzhen.

Pretty soon apartments will no longer have a gift attached but will be the side gift in dealings if this continues.
 

[Lucius]

Where does their real estate market situation actually come from? The fact is that they built massively and obviously without making any meaningful assessments in terms of the number of built apartments in relation to the number of people who will need them - but for me the main question here is "where are all those Chinese people who don't buy new apartments"?

I remember that at their last population census, there was a Chinese (probably an expert in demography) who stated that China actually has about 1.2 billion people, not about 1.5 as is usually said officially. The one-child policy, which existed for quite a long time, was obviously successful, but can we say that it may be coming back to them in a negative sense?

[stompix]

Where does their real estate market situation actually come from? The fact is that they built massively and obviously without making any meaningful assessments in terms of the number of built apartments in relation to the number of people who will need them - but for me the main question here is "where are all those Chinese people who don't buy new apartments"?

I remember that at their last population census, there was a Chinese (probably an expert in demography) who stated that China actually has about 1.2 billion people, not about 1.5 as is usually said officially. The one-child policy, which existed for quite a long time, was obviously successful, but can we say that it may be coming back to them in a negative sense?

China is overbuilding, it's hard for us to picture this as we have a completely different mentality.
Maybe someone from Romania could explain this better as they have the same thing about buying and owning a house, in China with limited opportunities and a different midnset a house is a must, so a lot try to buy one or have them as an investment.

So you have continuous building because there was demand to a point where clearly demand is no longer there after enormous growth and everyone is wondering what the hell we sold 100 million in the last 10 years why can't we sell another 10 million per year now? They didn't realize there would be oversaturation and that most who afforded one had already contracted on, they thought everyone would be willing to invest, well, you can't have every family owning 3 houses as an investment cause you will never have 3 billion renters, right, especially in a country where everyone wants to buy not to rent from a landlord!

They could be indeed 1.5 billion, they've built for 300 million extra! And still going because if they stop building companies with tens of billions and millions of workers go bankrupt and unemployed!

[Lucius]

So it's about some of their philosophy of having more than what you really need - but I still don't understand that at some point CP didn't see the problem and decided that such a practice had to be stopped because otherwise what's happening now will happen. Maybe the problem is in the Communist Party of China, because I know how communism works, I can only say that they are masters of pushing problems under the carpet, of course until there is no more room under the carpet and everything starts to come out.

I take a look at their ghost towns and see that their peasants have perhaps a unique opportunity, fields between luxurious villas and livestock that live to a high standard




Source

[justdimin]

Where does their real estate market situation actually come from? The fact is that they built massively and obviously without making any meaningful assessments in terms of the number of built apartments in relation to the number of people who will need them - but for me the main question here is "where are all those Chinese people who don't buy new apartments"?

I remember that at their last population census, there was a Chinese (probably an expert in demography) who stated that China actually has about 1.2 billion people, not about 1.5 as is usually said officially. The one-child policy, which existed for quite a long time, was obviously successful, but can we say that it may be coming back to them in a negative sense?

I think it's just about the fact that some people prefer this one and I have no idea why they are doing it. They think it's a way to get away from trouble but the reality is that it is not going to be that easy to handle any of this. We should be considering this as something that is a bad investment considering as long as you keep getting more real estate you risking it being a bigger risk, diversification is important if you could buy a few and still have investment at crypto that would be great but if you do not then you are going to be fine.

I think the best thing would be investing into a few different things and we could make a lot of money with a lot of diversification, if you want to invest into it then you could do something that will take a while and we could be doing something a lot better. I believe that the best thing to do right now would be just focusing on what you are going to do a lot better and can't be really taking a risk.

[Bitcoin Smith]

China banned and unbanned Bitcoin multiple times so I am not sure the exact legality status at the moment but based on the Google search it was banned in 2024 Q1 so even the real estate agents wants they can do it and they don't have a much option cause we are talking about China not some Democracy.

Here in India too the real estate market has been up and down and since COVID the market is facing decline though on average scale but it's something happening due to the evolution of technology now people can be more scattered all over the country instead of a certain town for jobs and everything.

[milewilda]

So it's about some of their philosophy of having more than what you really need - but I still don't understand that at some point CP didn't see the problem and decided that such a practice had to be stopped because otherwise what's happening now will happen. Maybe the problem is in the Communist Party of China, because I know how communism works, I can only say that they are masters of pushing problems under the carpet, of course until there is no more room under the carpet and everything starts to come out.

I take a look at their ghost towns and see that their peasants have perhaps a unique opportunity, fields between luxurious villas and livestock that live to a high standard




Source

Thanks for the share up bud. I wasnt expecting that there are indeed abandoned projects something huge scale as this which turned out to be a ghost town. I have read up everything on the link
given or provided above on which it is really that truly devastating into its developers. There are indeed tons of factors on which it could affect out like affordability plus into those times
where Covid is still in existence on which this could really be that resulting into this kind of outcome or result. You have definitely said the right thing that about in contrast with their mindset on having that more
than on what you do need will really be having that also its cons too. Not all the time that real estate business would turn out to be a success on which majorities mindset will really be something like this.
Risks is always there at the side and if you wont really be having those kind of good plans on where you do make those properties would be located or whatever factors still needed then
you would really be still suffering on the same outcome or result.

[jrrsparkles]

The real estate market has always been up and down and now with the rapidly increasing inflation people can't afford to buy the house like they used to be because the salary isn't appreciated along with the inflation that created imbalance in the system that will take time to be corrected.

Maybe the Chinese government needs to work on their interest rates for better solution than using the perky ways which obviously not effective in my opinion.

[tabas]

The real estate market has always been up and down and now with the rapidly increasing inflation people can't afford to buy the house like they used to be because the salary isn't appreciated along with the inflation that created imbalance in the system that will take time to be corrected.

Gone are the days when even minimum wagers could afford to buy a house and pay a mortgage without having any financial pressure. Today, because of inflation and other factors combined, many are choosing not to reach their dream houses anymore. Cost of necessities are increasing but wages aren't, thanks to capitalism.

Maybe the Chinese government needs to work on their interest rates for better solution than using the perky ways which obviously not effective in my opinion.

It's going to take time for that when the signs have been obvious from the fall of Evergrande.

[jrrsparkles]

Maybe the Chinese government needs to work on their interest rates for better solution than using the perky ways which obviously not effective in my opinion.

It's going to take time for that when the signs have been obvious from the fall of Evergrande.

We can't expect the results over time and if we try to keep things via shortcuts it won't hang there for too long will obviously backfire at them.

But they are not really capitalist not democracy so they can do anything as they wish and no one will be asking questions about that but in other places things will get real dirty that's why we better look for the long term solutions which may be less harmful than instant solution.

[tabas]

Maybe the Chinese government needs to work on their interest rates for better solution than using the perky ways which obviously not effective in my opinion.

It's going to take time for that when the signs have been obvious from the fall of Evergrande.

We can't expect the results over time and if we try to keep things via shortcuts it won't hang there for too long will obviously backfire at them.

Yeah, it's for sure going to be back but we don't know when, and even them, they don't know when it will.

But they are not really capitalist not democracy so they can do anything as they wish and no one will be asking questions about that but in other places things will get real dirty that's why we better look for the long term solutions which may be less harmful than instant solution.

They're a communist state and that's why they can do anything. I think it was also in China where deposits of their own people have been frozen due to the unforeseen turmoil of their economy. I wonder what's really the deal there if they're having a bad economy but in some "propaganda" videos say that they're doing well and have a lot of jobs even for the new graduates that can cater majority of them.

[stompix]

The real estate market has always been up and down and now with the rapidly increasing inflation people can't afford to buy the house like they used to be because the salary isn't appreciated along with the inflation that created imbalance in the system that will take time to be corrected.
Maybe the Chinese government needs to work on their interest rates for better solution than using the perky ways which obviously not effective in my opinion.

China's inflation rate is between 0.3% and 0.6% on a yoy basis.
You're mistaken the problem here, it's not that houses are not affordable or prices are up, it's that Chinese people don't want to buy anymore because of oversupply, a possible deflation on the horizon, the attractivity of an investment going down, migration policies and a change in lifestyle where the mandatory house before getting married is no more needed since they don't marry at all, with a decline of over 10% over pre covid numbers.
And China needs real estate prices to go up since it's a huge chunk of their GDP and income!

China got old before getting rich, they don't have the money for grandiose investments and they don't have the need for an oversupply of things that nobody is interested in.

[DrBeer]

This is just one manifestation of the global crisis of the Chinese economy.... One of the reasons is the total subsidization of the industry, its overheating, and subsequent decline. And this is against the background of the loss of sales markets (I mean “expensive”, solvent markets), as well as the destruction of economic ties with the Western world and markets accordingly. Which for an export-oriented economy is almost synonymous with death.... But while the Chinese government is trying to pretend that there are no problems, it looks more and more comical.

As for gold and its reserves in China, this is also a story with many unknowns. Officially - China has been the largest buyer of gold on the world market since 2020. But... data on reserves are classified, no one has access to China's gold reserves (as well as other countries), and knowing the historical facts about information manipulations of the Chinese government to create a positive picture, we can not be sure that the declared reserves correspond to the real ones. And it is not clear whether it is gold or tungsten in a gold shell....