Big Take Asia China Had a Plan to Rescue Its Housing Market. It’s Not Working
17 snips
Dec 17, 2024 Lulu Chen, Bloomberg's editor for Asia Finance, delves into China's housing market crisis. She reveals how tens of millions of empty apartments and cash-strapped developers underscore the situation's severity. The discussion highlights Zhengzhou, a city battling the fallout, and the government's questionable initiatives to transform unsold units into affordable housing. Chen emphasizes the profound economic implications if the rescue efforts falter, raising concerns about homebuyer confidence and the potential long-term effects on China's economy.
AI Snips
Chapters
Transcript
Episode notes
Zhengzhou: Ground Zero
- Zhengzhou, home to the world's largest iPhone factory, became ground zero for China's housing crisis.
- It was at the center of mortgage boycotts and saw its real estate market crash early on.
Overbuilding and Competition
- Zhengzhou's urban area more than doubled, but its population only grew by less than 50% in the decade leading up to 2020.
- Overambitious development and competition with other cities contributed to its housing bubble.
Zhengzhou's Rescue Attempts
- Zhengzhou implemented various measures like loans to developers, buying surplus units, and subsidizing home replacements.
- The government bought over 100,000 unsold units, primarily funded by commercial bank loans at a low 3% interest rate.