Housing prices plummet and mortgage payments are cut off, with serious consequences.

Summary

The 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.