China
China’s Property Sector Faces ‘Total Meltdown’ Despite Stimulus Push, Experts Say [Feb 15] (source – epochtimes);
Case study from the article: 1500 sq ft unit, 18 miles from Beijing, $350k cost in 2017, 20% down, monthly payment $650. Attempted sale last year for $110k; no buyers. Rented out now for $200/month, less utility + property fees = $110/month “income” vs $650 payments. Net: a value decline of around 70%, and -$540 in the hole every month. Massively deflationary.
99% Collapse (Not Clickbait): China’s Catastrophic Crash | Australia-China Incident | Taiwan (source – chinaupdate);
Dave’s Discussion
China is in a severe depression if the property ownership case from Epoch Times is a representative sample. A 20% drop in property prices means your down payment is gone (a 100% loss), but a 70% drop is a 350% loss – a 3.5 bagger in reverse. The “other option” is to lose $550 per month for the next 22 years, “renting the place out.” Now apply this math to people who have multiple properties. What can the central government possibly do to fix this problem? Print money and hand it out to the little-people property owners? That’s not gonna happen – the little people never get the bailouts. The (likely nationwide) destruction of middle-class wealth is (my guess) a “mandate-of-heaven” event. Such a concept supposedly “no longer exists” in China, even though this paradigm has been around for at least 2000 years. To pile on, foreign direct investment money continues to flee China – and almost no money is entering.
by irishprince 
