So many people mindlessly just assume property market crash = economic crash.
in my knowledge, the only time in human history that property market crash lead to catastrophic systematic economic crash happened at USA during 2007.
There's lots of other countries, at different points of time, suffers from bad property market crash but none them make the whole economic crash like USA did in 2007 (I mean relatively, surely property market crash always harm overall ecnomy to some degree, but none as bad as USA 2007).
Why? The entire USA economic growth post dotcom burst at year 2000 is dependent on financial market. And the open secrete about USA financial market is it's entirely dependent on property loan market - random subprime loan companies give reckless mortgage to people can't possibly repay it -> at a premium interest rate. And they immediately package these mortgage as financial product and sell to big USA finance company -> these big companies interm drive most of USA economic growth.
Put it simply, USA's economic growth post year 2000 is fundamentially tied to property market mortgage. When property price drop, people default their mortage and whole USA economy crashed.
That is a situation unlikely to repeat for China (and most of the world). Yes economic will surly suffer if property price crash, but it won't be as bad as USA did in 2007.作者: xp_theman 时间: 2014-4-15 14:01:41
It's good to know Bank in China is actually acting more responsible than US banks!
Strict lenting condition protect economy from property market crash.作者: psp2 时间: 2014-4-15 14:54:51
there are so many new houses (apartments) in china. not many here.
in China, (most of ) the seller = developer. If no sale, they still have to pay bank interests. if the bank is tight on lending and sale not good, these company may go bankrupt. Some of them will have to lower the price to sell the house.
in NZ, (most of ) the seller = house owner or investor. If no sale, they can still live in the house or rent the house out, still have cash flow. Don't see the point they have to lower the price.
And the rent here is much higher China. investor can rely on rent to pay the mortgage.作者: adslnz 时间: 2014-4-15 15:09:25