this post was submitted on 06 Jan 2024
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They are implying that these are bad things to have happen in your country but reality is the exact opposite.
Uh...sounds to me like this is awesome for the average citizen (or as the dystopian capitalist newspeak calls us, "the consumer"). Prices going down while wages stay the same (or even increase) means regular people can afford to buy more stuff for the same amount of money.
Isn't this what capitalist propaganda is always promising would be the result of market competition and technological advancement? That as production becomes more efficient the costs go down and thus what was previously a luxury for the wealthy becomes widely available to the masses? That the standard of living increases as the people get access to more and more consumer goods? Isn't that the whole point of progress and how capitalism is justified in the narrative that was sold to us in school?
Yeah, that's right, housing is getting more affordable and less parasitic speculation is taking place. This is a good thing and inshallah this trend will continue. Get absolutely fucked real estate speculators! Yes, in China housing is for living in - a novel and shocking concept, i know.
Meanwhile in the US homelessness is an absolute epidemic because of the skyrocketing price of housing, and from personal experience i can tell you Europe's housing market isn't far behind either.
But if you're the Financial Times i guess the prospect of more people dying on the streets excites you. You get all hot and bothered thinking of how that can serve as a warning to the uppity plebs who would dare consider refusing to allow themselves to be exploited to the maximum working three jobs until they suffer a mental breakdown for the profits of the billionaire perverts who pay you to write this filth. The real estate speculators making bank is just a happy side effect really...
Incidentally this is in the exact same vein as articles where they are trying to make it seem like the Russian economy is not doing well because it is "overheating" (growing "too fast"), or because the amount of job vacancies (i.e. employers looking for employees to hire) has increased. What they are really saying is that it is bad that Russia now has very low unemployment and that workers have more leverage over employers due to the fact that there is a demand for labor. The effect of this is of course that wages are going up. Again, good situation for the majority of the country, especially since inflation is much more under control in Russia than in much of the West...not so good for those who want to have an easier time exploiting workers since now the reserve army of labor has shrunk.
But of course western media always need to find a way to make it seem like it is bad that other countries are objectively improving the lives of the majority of their people. That's something only these evil authoritarian states do, you see? And aren't you so glad that here in the democratic free world we do the opposite of that and always craft policies to benefit the 1% at the expense of the rest?
You can see all these points made in the opposite direction when they talk about US GDP increasing. Many liberal economists have been utterly bamboozled by the concept of "the economy" doing better while public sentiment is very unhappy, but it makes total sense if, completely unlike China, "the economy" improving is actually only synonymous with "capitalists getting richer". It's also why we need better measures than GDP if we're going to do actual economic analysis. These neoclassical economist dipshits would have you believe that doubling your food prices is actually good and a sign of a successful economy because it means that the GDP number goes up.
At this point, I think of the US GDP going up (in lieu of deeper statistics) as a sign that the economy - as in, the actual one that 90% of the population live in - is getting worse, not better.
Question I have is how dose ownership work for the average person? I have a home loan, and if the price of my house drops below the loan value then its possible for me to be in a situation where I sell my house and still have a loan balance.
Is it different for the average person in China?
That's a real question.
Bear in mind i have never lived in China so someone who has may be more informed on this issue, but from what i have heard and read home loans aka mortgages are not as common in China as they are especially in the US. The mortgage regulations are much stricter and they usually require a more significant down payment, like anything from 30% to 60%. You often hear the statistic that 90% of Chinese people own their own homes, but an even more interesting one is that (officially) 80% of those are mortgage free. Due to the closer family ties in China parents often help out their children pay for their homes up front rather than take a out a bank loan.
Mortgages are more common for owners of multiple properties who buy second and third homes for various reasons (which is a fairly high percentage of home owners, maybe even as high as 20%, since owning real estate is seen as a good investment for retirement or even to leave to children).
As for how falling housing prices affect people with home loans, this is entering into more speculative territory on my part since i don't have data on this, but i suspect that most people who are buying their first home aren't looking to sell it again any time soon, if at all. They are buying because they plan on settling down and living there. This is of course different for people who buy additional property for the sake of investing and who might have been hoping to turn a profit by selling when the housing market was still rising. They will have to accept the loss or find other uses for their property.
The problem with home loans is that they are rife for abuse by speculators. A common scheme in a rising property market is to buy real estate on credit then use that rising value as collateral for another credit for another property and so on. This contributes to the growth of bubbles that eventually have to pop. Better that China popped its housing bubble now, in a deliberate and controlled way.
OK that makes way more sense. Thanks for the information comrade!