CHINA IS SITTING ON THE BIGGEST REAL ESTATE BUBBLE IN MODERN HISTORY

CHINA IS SITTING ON THE BIGGEST REAL ESTATE BUBBLE IN MODERN HISTORY


 

CHINA IS SITTING ON THE BIGGEST REAL ESTATE BUBBLE IN MODERN HISTORY

April 18, 2016

 

With seven of the most expensive cities relative to income in the world, China is in the midst of the greatest real estate bubble in modern history.

Real estate price-to-income ratios are skyrocketing in the Asian superpower—Beijing is 33.5 times income, Shanghai is 30.2 and Shenzen is 30.

Topping it off, the Chinese have invested massively in real estate, with 75% of all Chinese wealth in the sector, equities.com reports.

Chinese wealth pours into the US real estate sector as well, as Chinese investors are the biggest foreign buyers of US real estate.

When the country’s bubble pops, the resulting crash could be devastating. It would take an 80% decrease in value for Chinese property to get back to its pre-bubble values of the early 2000s.

That’s not even mentioning China’s even bigger problem—its massive $34T credit bubble, which hedge fund manager J. Kyle Bass has predicted could be four times as bad as the 2008 crisis (which he also predicted). [Equities]

 

China Is Sitting On The Biggest Real Estate Bubble In Modern History