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

[mahaveer96]

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:

https://www.talkimg.com/images/2023/08/25/Mrwlc.jpeg

^ NOT a Toblerone !

The article is a bit old but it's the only one out of a few tens I've read that covers every step.
https://www.theguardian.com/world/2023/jun/12/gold-bars-used-to-lure-chinese-homebuyers-amid-market-slowdown

TLDR:

property developers are struggling to shift stock is that several cities, in an effort to stabilize the market, have banned developers from cutting prices. Huafa Tianfu, a developer in the eastern city of Hangzhou, has been offering up to a kilo of gold bullion to tempt people into buying its flats, if it were 24 carat the 1kg bar would be worth about 450,000 yuan, or 18% of the value of the accompanying flat.

So, in the long version, how and why is this happening:

- Economic slowdown, deflation on the horizon housing sales have crashed
- The government can't allow the prices to go down that much because it will trigger something worse than 2008, with the main government and regional ones being in debt close to 300% which will be a disaster
- Since house estate developers are unable to cut fixed prices, they offer you a deal, giving you the house cheaper in reality but at the same time keeping the price up techically

So you buy 2 million yuan and you get a 400 000 yuan gold bar, so the price of the house stays at 2 million but you only pay in reality 1 600 000!

Now, we all know the Bitcoin situation in China is far than ideal, very far, like over the hills and far away, but could this be some breakthrough momentum when you're not allowed to pay what's worth but what's being said it's worth?

Let's look at it:
- Most are afraid that the bar will be fake, or of lower purity, total advantage bitcoin.
- Gold is harder to buy and once controls are in place no way near a million people a year will be able to get their bars
- Not that I'm advocating this but, it's a bit easier to deal with some accounting books once you deal with coins,I mean you can say that you gifted him 1 Btc and then send another 1 btc to some address. Again I'm not defending or advocating for tax evasion!
- The government doesn't like the gift loophole but doesn't like Bitcoin either so you got your hands already, but it will like a bit more since they are interested more in gold than in coins
- The developers won't have to pay one hundred armed guards to keep safe 1 ton of gold will the clients be afraid to leave the agency carrying a bar in their pocket, it can be done online

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?

It's absurd how the real estate market is getting so creative. Getting a gold bar with your house sounds tempting but risky. Similar to Bitcoin's transparency, Gold's value and authenticity can be tricky to verify. China's economic slowdown is pushing developers to keep prices high while offering real discounts. This method might help stabilize the market in the short term, but it could lead to long-term issues.
From personal experience, odd incentives like this often indicate deeper problems. Assessing the overall market health and not just the deal is essential. If you're considering such an offer, thorough research and professional advice are crucial. And if you're thinking of moving, check out threemovers. They made my relocation feel like an easy job.

[boykaz]

It's absurd how the real estate market is getting so creative. Getting a gold bar with your house sounds tempting but risky. Similar to Bitcoin's transparency, Gold's value and authenticity can be tricky to verify. China's economic slowdown is pushing developers to keep prices high while offering real discounts. This method might help stabilize the market in the short term, but it could lead to long-term issues.
From personal experience, odd incentives like this often indicate deeper problems.

[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.