Housing prices plummet and mortgage payments are cut off, with serious consequences.
Summary
TLDRThe video script discusses a significant drop in China's housing prices as of July 7th, 2024, highlighting the case of Herong city where houses are extremely cheap. It details the drastic price reductions in Shenzhen's property market, with some areas experiencing a 70% decrease in two years. The script also touches on the emotional impact of these declines on homeowners and the broader economic implications, including the potential for a financial crisis and the government's struggle to address the issue amidst a sluggish economy.
Takeaways
- 📉 Housing prices in China have significantly dropped, with some cities experiencing a decrease to as low as a few thousand to 20,000 USD for a property.
- 🏙️ The city of Herong in Northeast China has seen an extreme decline in housing prices, with a 77 square meter house being bought for just 8,000 USD in 2019.
- 📈 In contrast to 2019, the average housing price in Herong was 300 USD per square meter, while in Eastern Chinese cities, prices were much higher, ranging from 1,650 to 2,750 USD per square meter.
- 📊 A general decline in housing prices has been observed across China, including in first-tier cities like Beijing, Shenzhen, Guangzhou, and Shanghai, with smaller cities seeing a drop to 60-70% of their peak prices.
- 💔 The decline in housing prices in Shenzhen is particularly striking, with a 92 square meter house that once cost 1.63 million USD now having a transaction price of 8,600 USD in 2023.
- 📉 Residential areas in Shenzhen have seen a 70% decrease in housing prices over the past two years, with some areas experiencing a drop of 59.4% to 67.2%.
- 🏘️ Housing agents in Shenzhen report a significant reduction in property prices, with some starting legal auctions at only 550,000 to 690,000 USD for properties originally valued between 960,000 to 1.1 million USD.
- 📉 The housing market in China is currently in a slump, with many homeowners unable or unwilling to sell at the drastically reduced prices.
- 📊 The National Bureau of Statistics of China reports a 10.1% year-on-year decrease in real estate investment and a 19% drop in housing sales area in the first half of 2024.
- 🏗️ The downturn in the real estate market has led to many construction sites being idle and unfinished buildings, impacting the economy and personal wealth of many Chinese families.
- 💡 Chinese economist Wu Jing Leon suggests that the middle class in China may be naive about their fundamental interests and the security of their investments in real estate.
Q & A
How far have housing prices in China fallen by July 7th, 2024 according to the transcript?
-The transcript does not provide a specific percentage for the overall fall in housing prices by July 7th, 2024. However, it mentions that in some cities, housing prices have fallen to as low as a few thousand to 20,000, and in Shenzhen, prices have seen a significant decline over the past few years.
What is the situation with housing prices in the city of Herong as described in the transcript?
-Herong, a declining industrial city in Northeast China, is highlighted for its incredibly cheap housing prices. In 2019, a house of 77 square meters was bought for just $8,000, which was significantly lower than housing prices in other Chinese cities at that time.
What was the average housing price per square meter in Herong in 2019?
-The average housing price in Herong in 2019 was $300 per square meter.
How did housing prices in Shenzhen evolve from 2021 to 2024 according to the video released in March 2024?
-Housing prices in Shenzhen reached a historical peak in February 2021 with a 92 square meter 3-bedroom house priced at $1.63 million. However, by 2024, the unit price of newly sold properties continued to fall to $6,576 per square meter.
What is the significance of the housing price decline in Shenzhen's residential areas mentioned in the transcript?
-The transcript mentions that some residential areas in Shenzhen have experienced a price drop of 70% in just two years, indicating a significant and rapid decline in the housing market.
What is the context behind the housing price drop in the community mentioned in the June 2024 article?
-The article discusses an 83 square meter two-bedroom apartment that cost over $220,000 at its peak but is now listed for less than $54,000, highlighting the drastic reduction in housing prices and the difficulty in selling even at reduced prices.
What was the housing price in a place called B near Nanjing according to the February 2024 discussion?
-The housing price in a place called B near Nanjing was $1,788 per square meter in 2019 and had fallen to $963 per square meter by the time of the discussion in February 2024.
What consequences did the housing price decline have on homeowners as illustrated in the transcript?
-The transcript describes several consequences, including homeowners being sued by banks and having their homes auctioned off, as well as the emotional toll of seeing the value of their homes plummet.
What does the transcript suggest about the broader economic implications of the housing market downturn in China?
-The transcript suggests that the downturn in the housing market has impacted the Chinese economy significantly, with investment in real estate falling and sales area dropping. It also mentions that many Chinese families have invested a large part of their wealth in real estate, making them vulnerable to the market's volatility.
What are the predictions regarding the future of China's housing market according to the transcript?
-The transcript includes predictions that housing prices must fall by 40% before the market can correct itself, but also notes that some scholars believe this is impossible and that a financial crisis may occur by the end of the year.
What measures have Chinese officials taken in response to the housing market downturn as mentioned in the transcript?
-The transcript mentions that Chinese officials have taken more stimulus measures, but it also notes that the hard-hit real estate industry has still not bottomed out.
Outlines
📉 Dramatic Housing Price Decline in China
The video script discusses the significant drop in housing prices in China as of July 7th, 2024. It highlights that 95 cities have experienced a drastic reduction, with some cities like Herong seeing prices so low that one could buy a house for the price of a BYD electric car. The script introduces Herong, a declining industrial city in Northeast China, where houses have become incredibly cheap. It recounts the story of a 77 square meter house bought for just $8,000 in 2019, a stark contrast to the high housing prices in other Chinese cities at the time. The script also details the decline in housing prices in Shenzhen, showcasing a 92 square meter house that saw its price plummet from $1.63 million to $6,576 per square meter within a few years. The narrative includes statistics and personal stories, illustrating the economic impact on individuals and the broader real estate market.
🏘️ The Plight of Homeowners Amidst China's Property Market Crash
This paragraph delves into the emotional and financial turmoil faced by homeowners in China due to the property market crash. It describes how housing agents are now dealing with a market where properties are selling at significantly lower prices than their original valuations. The script shares anecdotes of properties in Shenzhen that have seen a decrease of up to 70% in value over two years. It also recounts personal stories, such as that of a woman who bought a flat for nearly $400,000, only to see its value drop to less than her outstanding loan amount within a year. The paragraph paints a bleak picture of the housing market, with some properties being offered at a loss just to offload them and avoid further financial ruin.
📉 The Ripple Effects of China's Housing Market Downturn
The script moves on to discuss the broader implications of the housing market downturn in China. It presents a series of unfortunate events faced by homeowners who are unable to keep up with their mortgage payments, leading to legal actions and property auctions. The narrative includes a detailed account of a homeowner whose property value halved, resulting in a significant loss after the bank auctioned it off. The paragraph also touches on the impact on the banking sector and the wider economy, with investment in real estate falling and a surge in loan defaults. It concludes with a commentary on the naivety of the middle class and the importance of societal stability for individual futures.
🌐 China's Economic Outlook Amidst the Real Estate Crisis
The final paragraph of the script addresses the potential future of China's economy in light of the real estate crisis. It cites expert opinions suggesting that housing prices need to fall by 40% for the market to correct itself, while others predict an impending financial crisis. The script outlines the challenges faced by the Chinese government in addressing the housing market issue and the potential for a prolonged economic downturn. It concludes with a warning about the vicious cycle that the economy has fallen into and the need for a comprehensive solution to prevent further economic decline.
Mindmap
Keywords
💡Housing Prices
💡Declining Industrial City
💡Property Market
💡Foreclosure
💡Auction Price
💡Loan Defaults
💡Economic Downturn
💡WeChat Moments
💡Real Estate Investment
💡Market Correction
💡Financial Crisis
Highlights
On July 7th, 2024, housing prices in China have significantly fallen, with 95 cities experiencing a drastic drop.
The city of Helong in Northeast China has seen its housing prices become incredibly cheap, with some homes priced as low as a few thousand to 20,000 USD.
In 2019, a 77 square meter home in Helong was purchased for only 8,000 USD, highlighting the drastic price reduction compared to other Chinese cities.
The housing market in China, including first-tier cities like Beijing, Shenzhen, Guangzhou, and Shanghai, has experienced a decline.
Property prices in smaller Chinese cities have generally fallen to 60-70% of their peak prices.
Shenzhen, China's most prosperous city, has seen a significant decline in housing prices, with some residential areas dropping by 70% in two years.
A detailed account of housing price drops in Shenzhen from 2021 to 2024 shows a continuous decrease, reaching as low as 6,576 USD per square meter.
The decline in housing prices has led to financial distress for many homeowners who bought at peak prices and are now facing negative equity.
Bank employees are struggling with the surge in home loan defaults and are seeking solutions to avoid further financial losses.
The housing market downturn has resulted in many unfinished buildings and idle construction sites due to defaults by large developers.
The Chinese economy is being significantly impacted by the real estate slump, with investment in real estate falling by 10.1% year-on-year in the first half of 2024.
Economists predict that housing prices in China must fall by 40% before the market can correct itself.
The decline in housing prices has wiped out the savings and down payments of many Chinese families who invested heavily in real estate.
The Chinese government's financial resources are becoming increasingly scarce, making it more challenging to address the housing market issue.
The real estate downturn has led to a vicious cycle in China's economy, with no immediate signs of recovery.
Chinese middle-class naivety is highlighted, with a belief that owning a house and a car equates to a secure future, which may not be the case in an imperfect society.
The transcript concludes with a call to action for viewers to engage with the content by liking, subscribing, and sharing.
Transcripts
[Music]
fore spee
exactly how far have China's housing
prices
fallen on July 7th 2024 and nison on the
xplatform posted 95 cities in China are
already like the city of herong now with
a few thousand to 20,000
although you can't buy a byd electric
car after a price reduction you can buy
a house attached below the post is a
list of cities with very low prices for
buying a house as you can see from the
picture many provinces and cities in
China such as Leo ning jayin heong Jang
inner Mongolia Shen Jang Gansu ning xia
herb Shandong and guangong are all
listed here I would like to introduce
the city of herang a declining
industrial city in Northeast China
houses in this city are are incredibly
cheap the origin of this statement is
that in 2019 a crew member from Joan
Jang Province bought a 77 s met 2
bedroom and one living house in this
city for us 8,000 at that time housing
prices in other Chinese cities remained
high so the story immediately spread on
the internet at that time the average
house price in herang was us $300 per
square meter in 2019 in cities in
Eastern China for example housing prices
in the suburbs of Joan J Jang Province
Were Us
1,650 per square met and houses near the
city center were about us
$2,750 per square
Meer in just a few years China's entire
property Market has fallen including in
first tier cities such as Beijing
Shenzhen Guang Joo and Shanghai while
property prices in smaller cities have
generally Fallen to 60 to 70% of their
Peak prices the following videos were
released in March 2024 and tell the true
story of the decline in housing prices
in Shenzhen China's most prosperous
city as can be seen from the video
housing prices in shenhai Shenzhen
reached a historical peak in February
2021 the total transaction price of a 92
met 3-bedroom house was us 1.63 million
and the unit price was as high as us
18,000 per square meter however starting
in February 2022 the unit price of
houses fell to
$1,000 per square meter in February 2023
the transaction price of a three-bedroom
apartment with 104 square m fell to
$8,600 per square meter in June of the
same year a 93 met apartment's unit
price of a 3bedroom house dropped to US
$
7,484 per square meter by November the
unit price of a three-bedroom house with
105 s m dropped to US $
6,782 per square
meter however it is not over yet in 2024
the latest transactions show that the
unit price of newly sold properties
continues to fall to us
6,576 per square meter the nison in this
video summarized the huge decline in
housing prices in Shenzhen over the past
few years and found that some resident
areas in Shenzhen have dropped by 70% in
the past 2 years this nison took stock
of the housing prices in the five
residential areas in Shenzhen which
experienced the largest
[Music]
decline the nison went on to say in
fourth place luhu dongmen 168 the
transaction price in January 2021 was us
$2,636 per square met and in July 2023
it was us
8,255 per square meter a decrease of
59.4% third place is futin bagway Ling
dormatory with a transaction price of us
$2,324 per square meter in February 2021
the transaction unit price in September
2023 was us8
$255 per square meter a 60%
decrease in second place luu Shu long
Garden the transaction price in February
2021 was us
$2,774 per square Meer and the
transaction price in 2023 was us
$674 per square meter a decrease of 67.2
4%
the drop in housing prices and chenz Jen
summarized by this medicon is really
shocking the following video is probably
the emotion expressed by a housing agent
the agent said for a house with a market
price of us 960,000 to us 1.1 million in
futian the legal auction price can now
start at only us 550,000 to us 690,000
house prices have dropped by an average
of about 20% in just one year
considering the decline in interest
rates it's at least 30% less than the
house I bought before now many Shenzhen
owners want to sell their homes but
don't want to sell them at a low price
those who can hold on can support
themselves and those who can't hold on
will be sued by Banks and
auctioned the agent said that the houses
she posted on her WeChat moments were
all about 22% lower than the market
price for example there was a house in
futi and shisha with a market price of
us
963000 and the starting price of the
legal auction is us 770,000 there is
also a four-bedroom property next to
Shenzhen University in nonan with the
market price of us 1.17 million the
legal auction price starts at us 530,000
it can be seen from this that housing
prices in Shenzhen have fallen
sharply this is not even the worst in
June 2024 an article titled the house
price in our community dropped to
$54,000 welcome everyone to come to wuo
Ching tanen and be my neighbor was
widely circulated on the internet the
article said that ten genen was the
first to innovate the Beijing Peninsula
project an 83 met two-bedroom apartment
costs more than us 220,000 per unit at
its peak the transaction price of the
same apartment is less than us 54,000
per unit and it's difficult to sell even
if the price is reduced in fact as early
as February 2024 Chinese nisin began to
discuss where housing prices have fallen
the most in China on February 15th 2024
nison I of the night snowball posted
where is the worst place where housing
prices have
fallen recently an anchor posted that in
a place called B near Nan Jing the
housing price in 2019 was us
$1,788 per square meter and now it's us
963 per square Meer calling at the place
where housing prices have fallen the
most the comment section is going crazy
atison from herbay was not calm anymore
he posted a post saying that when he
bought a house in Hui herbay it cost 2,4
$76 per square me but now it's
$316 per square me as long as he can
repay the mortgage the house will be
given away for free someone immediately
commented and said that the price in
shei Silver Beach and H Joe Guangdong
was originally
$2,476 per square Meer but now it's
about
$280 per square Meer the house that
someone bought for
$247,000 but now $110,000
no one wants it the post mentioned that
someone said as long as you can pay off
the mortgage the house will be given
away for free the girl below also
mentioned this topic in the
video the girl said that in 2022 she
emptied her parents Savings of almost 30
years and bought a large flat in the
North District the total price was about
us 400,000 the down payment was about us
120,000
she also paid a loan of us
275,000 it was quite popular when it
opened but by April and May 2023 the
market price of that house was less than
us
275,000 and it also came with a parking
space her previous loan interest rate
was 5.8% and now it's 4.1% a difference
of
110,000 this video is about the
consequences of a Beijing citizen who
couldn't afford a mortgage the female
nison said that the most miserable group
of people in Beijing are those who
bought houses in Yano with
loans in 2017 a friend of mine bought a
three-bedroom apartment in Yan Joo with
a loan of us 600,000 the down payment
was about us 18 180,000 and the loan was
us 412,000 the term was 30 years and the
monthly repayments were about us $2,340
4 years later he was surprised it was
discovered that the house bought for
600,000 back then has a market value of
only about
28,000 which has been cut in
half Anison said that her friend decided
to stop paying the mortgage but in the
first month when the payment was cut off
she received a text message saying 10
days overdue in the second month she
received a message saying 40 days
overdue and in the third month she
received a text message overdue for 40
days 70 days overdue 3 months later the
bank will call to ask if the principal
can be repaid in the seventh month you
will receive a courier from China Post
containing a court notice the judgment
will be issued at most 2 months after
the court session if the house is not
handed over the Executive Bureau will
conduct an online auction in half a year
and his home will be auctioned at 20%
off
220,000 after the house was sold the
previous loan of approximately us
413,000 was cut off and the interest
during the period was quadrupled
including legal fees Etc it became us
550,000 the house was auctioned and the
bank still had to pay about us
300,000 in June 2024 a video circulated
on the internet showed a family buying a
house for 233,000 and selling it for
122,000 losing almost half of it
the couple was feeling heavy after
selling their home nison commented as
long as the Communist party does not end
divorce will not be easy either others
said every Injustice has its owner every
debt has its owner and go out turn left
and look to the government this video
shows a building where many owners have
hung up red banners that say low price
transfer the above is the sad experience
of people buying houses a bank employee
in this video said that dian's housing
prices must not fall any further if they
fall any further some people really
can't afford it especially those who
took out a loan to buy a house
on July 12th 2024 nison little sweep
unposted wow Bank employees shouted in
horror it's terrible the number of Home
Loan cuto offs across the country is
simply unbelievable no one dares tell
the truth banks are trying their best to
communicate with customers to find
Solutions preferring to freeze loans for
a few years rather than get stuck in
auctions today's housing market auction
situation discourages them even if the
house is sold it cannot fill the
financial hole of the bank the property
Market is turbulent and many people's
down payments and savings have been
wiped out instantly so
frustrating the words of this nison
below may be a revelation to many who
have spent huge sums of money to buy
houses during the frenzied house buying
boom in the past few years but now have
a sharp decline in house prices the ja
beond go incident shows that knowledge
cannot determine destiny Shen Juan son's
Story shows that wealth cannot determine
destiny the Leno incident shows that
power cannot determine destiny in jangi
Ling's departure shows that cognition
determines Destiny Chinese Economist Wu
Jing Leon said China's middle class is
still very naive and does not know where
their fundamental interests lie they
think that as long as I have a house
drive a luxury car and have a wife and
children that will be enough in fact if
Society is not perfect one's personal
future is not guaranteed according to
the latest data from the National Bureau
of Statistics of China investment in
real estate fell by 10.1% year on-year
in the first half of 2020
24 while the sales area of housing also
dropped by 19% in the first 5 months of
2024 the decline was as high as
20.3% on July 15th 2024 according to
Reuters in June this year the price of
new homes in China fell at the fastest
rate in 9 years starting in 2015 and
real estate sales and investment also
fell sharply although Chinese officials
have taken more stimulus measures the
hard-hit real estate industry has still
not bottomed out starting in 2021 a
series of large Chinese developers
including ever Grand group have
defaulted one after another resulting in
many construction sites being idle
houses that could not be completed being
turned into unfinished buildings and the
housing market beginning to slump the
downturn in real estate has not only
impacted the Chinese economy but also
the wealth of Chinese people because
many Chinese families have invested a
large part of their wealth in real
estate real estate has continued to drag
China's economy significantly in recent
years some people may wonder how much
more housing prices in China will have
to fall before they bought them out in
June 2024 when yaoyong an economics
professor at peing University attended
the summer Davis Forum he told the
Chinese media that housing prices Must
Fall by 40% before China's Market can
correct itself however Wang Wang oen an
assistant researcher at the China
economic research institute in Taiwan
said Mainland Chinese Scholars say it
will fall to 40% which is basically
Impossible by the end of this year there
will probably be a financial
crisis The Scholar also said that if
China's housing market is in a downturn
China's entire economy will continue to
idle in the case of idling the Chinese
government's Financial Resources will
become increasingly scarce if it is
short-lived it will be more difficult
for the Chinese government to solve the
housing market problem Mainland China's
economy has now fallen into a vicious
cycle okay that's all for today please
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