China Property Market

[CityFarmer]

The biggest glaring difference between China and the west is that most of the houses are bought for 50% LTV. Most are skeptical until they realise that there are effectively 3 couples buying a house because of the 1 child policy.

But speculation is definitely there as Wenzhou has shown. As Wen JiaBao put it aptly, a small problem multiplied by 1 billion is a big problem. From Trust loans to now zero interest deposit loans, basically Evergrande has shown us what a "quality" developer it is. No management meeting needed.

Some states in the US can't bankrupt the person if they turn in the keys for mortgages they can't pay. I wonder what is Chinese bankruptcy law on this?

We need to differentiate the banks' mortgage loan and the developers' loan in this case. Mortgage loan LTV remains the same, while the developers sold the property with 25% less from listed price, with a name of a unsecured down-payment loans.

Personal bankruptcy is rare in China, IIRC, but I admit that I know little on the topic. May be a good research topic