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.

Outlines

00:00

📉 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.

05:01

🏘️ 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.

10:02

📉 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.

15:02

🌐 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.

Keywords

💡Housing Prices

Housing prices refer to the cost at which residential properties are bought or sold. In the video's context, it discusses the significant decline in housing prices across China, particularly noting the drastic reductions in cities like Shenzhen and Herong. The script mentions specific price points, such as the peak price of a 92-meter house in Shenzhen and how it has dropped over the years, illustrating the economic turmoil in the real estate market.

💡Declining Industrial City

A declining industrial city is one that has experienced a decrease in its industrial output and economic activity. The video uses the city of Herong as an example of such a city, where housing has become incredibly cheap due to the city's economic downturn. This term is central to understanding the broader implications of industrial decline on local real estate markets.

💡Property Market

The property market encompasses all aspects of buying, selling, and renting real estate. The script discusses the overall downturn in China's property market, including a decrease in investment and sales area, which has affected not only large cities but also smaller ones, leading to a widespread drop in housing prices.

💡Foreclosure

Foreclosure is the legal process by which a lender reclaims a property from a borrower who has failed to meet the repayment terms of a loan. The video script describes scenarios where homeowners are unable to continue mortgage payments, leading to foreclosures and forced auctions of their properties at significantly reduced prices.

💡Auction Price

Auction price is the amount for which a property is sold in an auction, often determined by bidding. The script provides examples of legal auction prices for properties in Shenzhen, which are substantially lower than the market prices, indicating the severity of the housing market decline.

💡Loan Defaults

Loan defaults occur when borrowers fail to repay their loans as agreed. The video mentions that a series of large Chinese developers have defaulted on their loans, leading to construction halts and an increase in unfinished buildings, which contributes to the downward pressure on housing prices.

💡Economic Downturn

An economic downturn refers to a period of negative economic growth or recession. The script implies that the decline in housing prices and the real estate market's struggles are indicative of a broader economic downturn affecting China's economy.

💡WeChat Moments

WeChat Moments is a feature of the WeChat social media platform where users can post updates visible to their contacts. In the script, a housing agent uses WeChat Moments to advertise properties at prices significantly lower than the market value, reflecting the desperate measures taken to sell properties in the face of falling housing prices.

💡Real Estate Investment

Real estate investment involves the purchase of properties with the intention of earning income or capital appreciation. The video script notes a significant year-on-year decrease in real estate investment, indicating a lack of confidence in the property market and contributing to the economic challenges faced by China.

💡Market Correction

A market correction is a decline in the value of an asset or group of assets to bring prices in line with their actual worth. The script cites an economics professor suggesting that housing prices in China must fall by 40% to achieve a market correction, highlighting the extent of the overvaluation in the real estate sector.

💡Financial Crisis

A financial crisis is a situation where financial assets rapidly lose value, often affecting the stability of the entire economy. The video script suggests that if the housing market continues its downturn, it could lead to a financial crisis in China, emphasizing the interconnectedness of the real estate market with the broader economy.

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

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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

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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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