"After two decades of runaway growth, by 2020, China's real estate bubble had pushed home prices to more than 17 times the average salaries. A perfect storm drove the boom, including reforms in 1998 that shifted housing from state provision to private ownership, the migration of nearly half a billion Chinese from rural areas to cities and abundant credit from state banks."
"Real estate giants like Evergrande, Country Garden and dozens of smaller firms defaulted, with more than 70 developers either going bust or needing state-backed bailouts to survive. More than five years later, the subsequent bust shows no sign of easing. According to Barclays, a British bank, more than $18 trillion (15.38 trillion) in household wealth has evaporated as home values collapse."
"In a sign of just how sensitive the downturn has become, Chinese officials last month told private data providers to stop publishing home sales figures, cutting off one of the few independent windows into the current woes in the real estate market. The move followed a 42% year-on-year drop in new home sales by the top 100 builders in October, the largest monthly drop in 18 months, according to China Real Estate Information."
Two decades of rapid growth inflated housing prices to more than 17 times average salaries by 2020. Reforms in 1998, massive migration to cities and ample bank credit drove construction, household investment and rampant speculation. During the first COVID-19 lockdowns, limits on developer borrowing under the 'three red lines' prompted defaults by major firms such as Evergrande and Country Garden and forced bailouts or failures for dozens of developers. Home values have collapsed, erasing around $18 trillion in household wealth. Construction weakness now drags overall GDP, and officials have ordered private data providers to stop publishing home sales figures amid steep declines.
Read at www.dw.com
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