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China mortgage boycott data erased by censors as crisis spreads

bloomberg.com

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Re: China mortgage boycott data erased by censors as crisis spreads

#31

Post by ganyu »

helge9210 wrote: post #7

Let's assume, there is no censorship and anyone can join the boycott. What is the intended successful outcome of the boycott? If noone would do anything (no boycott), some customers would have to pay mortgage for apartments that won't be finished ever. With boycott, the blast radius will be bigger, possibly affecting the banking system. What options do authorities have?

They don't. That's the point.

When you have an over-estimated stock on the market, it's going to drop. Eventually.

Re: China mortgage boycott data erased by censors as crisis spreads

#32

Post by sbierwagen »

ganyu wrote: post #27
CoastalCoder wrote: post #19

The linked story kind of buries the context info: > Nomura said the refusal to pay mortgages stems from the widespread practice in China of selling homes before they’re built. Funds from presales are kept in escrow accounts to use for construction. But confidence that projects will be completed has weakened as developers’ cash woes intensified. > “Inappropriate usage of presale proceeds and the lack of adequate super…

Short (?) intro for those who don't know how it works in CN: 1. Local govts are in heavy debt and sell land to pay back their debt. 2. Real estate corps pay a hell lot of money (don't care where they get them) to purchase a land ownership (for 70 years max) from the govt. 3. Before construction even begins, the real estate corps start selling the houses to citizens. 4. Citizens pay up to 40% of the total price on the…

>get it paid back in the NEXT 30 YEARS

Why emphasize that? 30 year mortgages are common in the US. At current rates of 5.5%, the total paid in interest will be bigger than the original loan.

Of course, most US mortgages are taken out on housing units that actually exist.

Re: China mortgage boycott data erased by censors as crisis spreads

#33

Post by [deleted] »

CoastalCoder wrote: post #19

The linked story kind of buries the context info: > Nomura said the refusal to pay mortgages stems from the widespread practice in China of selling homes before they’re built. Funds from presales are kept in escrow accounts to use for construction. But confidence that projects will be completed has weakened as developers’ cash woes intensified. > “Inappropriate usage of presale proceeds and the lack of adequate super…

[deleted]

Re: China mortgage boycott data erased by censors as crisis spreads

#34

Post by newsclues »

coliveira wrote: post #16
m3kw9 wrote: post #5

They can’t block GitHub because a lot of chinese tech firms depend on it. That is something very hard to develop locally because the entire world can contribute

I don't see any difficulty in replacing Gibhub... just create clone repos and you'll get everything. It is easier than youtube or similar.

Yeah, just steal/copy GitHub and offer a local version with censorship, and ban the uncensored version.

Re: China mortgage boycott data erased by censors as crisis spreads

#35

Post by CoastalCoder »

ganyu wrote: post #27
CoastalCoder wrote: post #19

The linked story kind of buries the context info: > Nomura said the refusal to pay mortgages stems from the widespread practice in China of selling homes before they’re built. Funds from presales are kept in escrow accounts to use for construction. But confidence that projects will be completed has weakened as developers’ cash woes intensified. > “Inappropriate usage of presale proceeds and the lack of adequate super…

Short (?) intro for those who don't know how it works in CN: 1. Local govts are in heavy debt and sell land to pay back their debt. 2. Real estate corps pay a hell lot of money (don't care where they get them) to purchase a land ownership (for 70 years max) from the govt. 3. Before construction even begins, the real estate corps start selling the houses to citizens. 4. Citizens pay up to 40% of the total price on the…

Aside from the fact that this is a pyramid scheme, it sounds pretty similar to how it works in the U.S. when building a new house.

Re: China mortgage boycott data erased by censors as crisis spreads

#36

Post by ganyu »

sbierwagen wrote: post #32
ganyu wrote: post #27

Earlier quoted context omitted.

Short (?) intro for those who don't know how it works in CN: 1. Local govts are in heavy debt and sell land to pay back their debt. 2. Real estate corps pay a hell lot of money (don't care where they get them) to purchase a land ownership (for 70 years max) from the govt. 3. Before construction even begins, the real estate corps start selling the houses to citizens. 4. Citizens pay up to 40% of the total price on the…

>get it paid back in the NEXT 30 YEARS Why emphasize that? 30 year mortgages are common in the US. At current rates of 5.5%, the total paid in interest will be bigger than the original loan. Of course, most US mortgages are taken out on housing units that actually exist.

What's the household leverage ratio there in US? That in CN is 72% in 22Q1, and even bigger in big cities.

Edit: CN definition: (household leverage ratio) = (mortgages paid in 22Q1) / (total disposable income in 22Q1)

Re: China mortgage boycott data erased by censors as crisis spreads

#37

Post by kevinventullo »

sbierwagen wrote: post #32
ganyu wrote: post #27

Earlier quoted context omitted.

Short (?) intro for those who don't know how it works in CN: 1. Local govts are in heavy debt and sell land to pay back their debt. 2. Real estate corps pay a hell lot of money (don't care where they get them) to purchase a land ownership (for 70 years max) from the govt. 3. Before construction even begins, the real estate corps start selling the houses to citizens. 4. Citizens pay up to 40% of the total price on the…

>get it paid back in the NEXT 30 YEARS Why emphasize that? 30 year mortgages are common in the US. At current rates of 5.5%, the total paid in interest will be bigger than the original loan. Of course, most US mortgages are taken out on housing units that actually exist.

I agree with you, and just wanted to add that saying one pays “more” in interest than the original loan value is implicitly ignoring the time value of money, in particular equating 2022 currency with 2052 currency.

Re: China mortgage boycott data erased by censors as crisis spreads

#38

Post by ganyu »

sbierwagen wrote: post #32
ganyu wrote: post #27

Earlier quoted context omitted.

Short (?) intro for those who don't know how it works in CN: 1. Local govts are in heavy debt and sell land to pay back their debt. 2. Real estate corps pay a hell lot of money (don't care where they get them) to purchase a land ownership (for 70 years max) from the govt. 3. Before construction even begins, the real estate corps start selling the houses to citizens. 4. Citizens pay up to 40% of the total price on the…

>get it paid back in the NEXT 30 YEARS Why emphasize that? 30 year mortgages are common in the US. At current rates of 5.5%, the total paid in interest will be bigger than the original loan. Of course, most US mortgages are taken out on housing units that actually exist.

30 years are pretty common, but paying for some property that never came out of the blueprint (and seemingly never will) does sound a bit odd..

Re: China mortgage boycott data erased by censors as crisis spreads

#39

Post by cronix »

newsclues wrote: post #34
coliveira wrote: post #16

Earlier quoted context omitted.

I don't see any difficulty in replacing Gibhub... just create clone repos and you'll get everything. It is easier than youtube or similar.

Yeah, just steal/copy GitHub and offer a local version with censorship, and ban the uncensored version.

I'm not sure I'd use the word "steal" with open source projects.

Re: China mortgage boycott data erased by censors as crisis spreads

#40

Post by HPsquared »

ganyu wrote: post #36
sbierwagen wrote: post #32

Earlier quoted context omitted.

>get it paid back in the NEXT 30 YEARS Why emphasize that? 30 year mortgages are common in the US. At current rates of 5.5%, the total paid in interest will be bigger than the original loan. Of course, most US mortgages are taken out on housing units that actually exist.

What's the household leverage ratio there in US? That in CN is 72% in 22Q1, and even bigger in big cities. Edit: CN definition: (household leverage ratio) = (mortgages paid in 22Q1) / (total disposable income in 22Q1)

What ratio is that measuring, loan-to-value or loan-to-income?

In the UK at least, a buyer can borrow up to 95% of the home's value and I think 4 or 4.5x the borrower's annual income.

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