The New CS Board

[jumanji0881]

China has conflicting policy goals -

My Comment: Xi wants lower RE prices to promote his goal of common prosperity but lower RE prices are causing the $62Tillion RE bubble to burst which can cause a global recession.


"Catastrophic" Property Sales Mean China's Worst Case Scenario Is Now In Play : https://www.zerohedge.com/markets/catastrophic-property-sales-mean-chinas-worst-case-scenario-now-play

Excerpts:
Evergrande, which is facing one of the country’s largest defaults as it wrestles with more than $300 billion of debt, has already missed coupon payments on dollar bonds twice last month.

With that background in mind, let's move on to the truly chilling latest developments: it now appears that China does not need Evergrande to officially default to unleash a property crisis - one has already arrived.

we bring readers' attention to a little noticed report in Shanghai Securities News, citing China Real Estate Information Corp. research (link), which revealed that more than 90% of China’s top 100 property developers’ sales declined in September by an average of 36% from the same period last year. According to the report:

Sept. sales totaled 759.6b yuan ($118BN), down 36.2% from September 2020 and 17.7% lower from the same period in 2019, deepening a downward spiral that started in July
Among companies, 60% of developers saw sales decrease by more than 30% y/y in Sept.
Beijing, Shenzhen and Guangzhou saw transaction volume of residential properties decline 30% y/y, while Shanghai fell 45%
We had to do a double take when we saw this because these are absolutely terrifying numbers and are, to put it bluntly, scarier than Goldman's "worst case scenario"; what's worse this sudden collapse in China's property market is taking place before Evergrande has even defaulted, an event which would lead to a glacial freeze in the property market as potential buyers hold off expecting liquidation firesales from the property giant in hopes of getting bargains. The problem is that in addition to being the world's largest asset, China's property market is also the world's largest ponzi scheme, and without constant inflow of new capital it would implode, especially when factoring in the 90 million vacant apartment which just sit inert and which would promptly be dumped by anxious owners, flooding the market with excess inventory and sending prices crashing.