Inflation-adjusted home prices in China have fallen below where they started two decades ago, and the fiscal fallout is hitting local governments even harder than developers.
Yes I know all that, bubbles result in stupid projects and poor quality, and banks stupidly believing growth will continue, so loaning to buy a house is easy. that’s the same here. I know how bubbles work.
But China has had an economic growth rate on an average of 10% many years of that period, it’s slowed down a bit in recent years but is still high.
But let’s say 15 years with 10% growth, that means the economy has grown 4 times in 15 years!!
So it’s crazy that prices fall back to less than when the economy was only 25% of what it is now.
Your description doesn’t explain that.
Yes I know all that, bubbles result in stupid projects and poor quality, and banks stupidly believing growth will continue, so loaning to buy a house is easy. that’s the same here. I know how bubbles work.
But China has had an economic growth rate on an average of 10% many years of that period, it’s slowed down a bit in recent years but is still high.
But let’s say 15 years with 10% growth, that means the economy has grown 4 times in 15 years!!
So it’s crazy that prices fall back to less than when the economy was only 25% of what it is now.
Your description doesn’t explain that.