It certainly isn’t capitalist to have such an insane gap between offer and supply. If lack of offer is a problem, the issues with such enormous oversupply are even greater. Just wasteful. Damaging to the environment. And introduces a lot of economic woes.
Just no. It's something libs seemingly can't understand : you need surplus to face problems and adapt to a changing situation or a crisis without people dying. Problem is that libs care more about money than people, so they seek an equilibrium where supply is right below demand so the capitalists can exploit the people.
No, that's an effect of collusion and cartelization of the economy. It's because you have very few actors supplying the product and the barriers of creating a similar product are too high, so new competitors cannot access the market. Then the current suppliers can sit on the product and wait for it to be at the right price, as long as it doesn't go to waste.
As you can see, all of this screens about real estate:
Cartelization/collusion: The aren't that many companies that have properties on sale
High cost to enter: Building is pricey, and it depends on the location of the property more than anything. So a building in one neighborhood is not a direct replacement of a building in another neighborhood.
Real estate does not go to waste. Unless bad luck or poor choices, your building should work fine for a couple of generations. And worst case scenario, the land already has a price.
This is the time when governments should intervene and come up with a proposal to solve the cartelization.
We have a solution, it is called anti trust legislation. We need to break up all of these too large to fail organizations. It’s ridiculous that we have only a handful of major players in soo many markets.
Yeah, and what happened to that legislation? Businesses bought the right politicians and defanged everything that inhibited their profits. Businesses have their thumbs on the scale making sure the FTC doesn't have the right people to be a threat.
Yes and no. Capitalism without regulations may bring this kind of issues. But capitalism with regulations shouldn't. The issue is that the required regulations are not being applied or do not exist.
We should not blame or put the weight of the issue in capitalism, when we clearly know we don't live in a perfect capitalistic world, and very few markets are like that. The issue is with politicians.
Capitalism destroys its own regulations because politicians are for sale! You're acting like politics and markets are different, but they're interconnected at their very core.
Don't blame capitalism for something that's at the core of any political system: Greed destroys it. Greed and humans are intertwined. It's not capitalism's fault. The same happened across history even when and where capitalism didn't exist: the Egyptian empire, the Roman Empire, the Soviet block and even in China now. Greedy people that can be bought will exist everywhere. The wish for power is not inherent of capitalism, is inherent of human nature. Failing to see that will lead to the same issue over and over again, in democratic or autocratic regimes.
"Planned by the libs", as if the "libs" were a single entity that have a homogeneous plan. Let's stop giving entity to stuff that never existed and realise that there is a structural problem that occurred because of bad management of our economy and policies. Because we had mediocre actors and in some cases actors with bad faith.
It is a bad thing! How are investors holding on to dozens of empty units at ridiculous prices supposed to get a return on investment if the market's oversaturated with living spaces?
Looks like we're gonna have to start tearing them down to reduce supply.
It's a problem for people who indebted themselves to buy those homes with a valuation based on scarcity. Also a problem for the real estate Chinese companies, sector which represents a quarter of Chinese economy.
Sounds to me like China is trying to solve both of those problems by lowering property scarcity - if this stays controlled it will make properties cheaper so people don't need to acquire as much debt and it will shrink the real estate sector. Since this housing is built through centralized control and not a market, it should be totally under control.
Obviously something unexpected could happen that blindsides the Party, but it looks like politics is in command and everything is proceeding as expected.
Obviously something unexpected could happen that blindsides the Party, but it looks like politics is in command and everything is proceeding as expected.
I take it you didn't read the article.
A former Chinese government official said the country's entire population of 1.4 billion wouldn't be enough to fill all of its empty houses, Reuters reported, citing a video from the state news agency China News Service.
China's real-estate struggles rose to prominence in 2021, when industry giant Evergrande became the most indebted company in the world and defaulted.
At the time, there were at least 65 million vacant properties in the country, which would have been enough to house the entire population of France, Insider previously reported.
To me, this seems wasteful. I'm not very familiar with the Chinese real estate market however.
At the time, there were at least 65 million vacant properties in the country, which would have been enough to house the entire population of France, Insider previously reported.
That doesn't actually mean there are 65 million surplus properties. A vacant house isn't an unnecessary house. Children move out all the time, families sometimes break up, Chinese citizens currently living overseas or in Europe return home, etc.
I bet there's actually math for this - I wonder if anyone has calculated the optimal amount of vacancies?
That doesn't actually mean there are 65 million surplus properties. A vacant house isn't an unnecessary house.
That is a very good point. I still find it hard to believe that they are making the best use of labor and materials with situations like this:
Ordos, near the border with Mongolia, was meant to hold over 1 million people and become a cultural and economic hub. But by 2016, its population was only around 100,000, and it has been described as "the largest ghost town in the world."
Sometimes, you misspeculate. Some developers lost a whole fuck ton of money on the project, but that's more than made up for if you can turn a profit on projects near big cities (which demand is still sky high for).
… isn't that the point?
Right?! Love how the article frames it as a bad thing because it doesn't make sense from a capitalist standpoint.
It certainly isn’t capitalist to have such an insane gap between offer and supply. If lack of offer is a problem, the issues with such enormous oversupply are even greater. Just wasteful. Damaging to the environment. And introduces a lot of economic woes.
Who do you think built all of those houses? Capitalists who were speculating on real estate.
Ah yes, because housing as a right rather than an investment is a bad thing.
Just no. It's something libs seemingly can't understand : you need surplus to face problems and adapt to a changing situation or a crisis without people dying. Problem is that libs care more about money than people, so they seek an equilibrium where supply is right below demand so the capitalists can exploit the people.
Sure it is! Capitalists just do it in the opposite direction; keep supply low so prices stay high.
No, that's an effect of collusion and cartelization of the economy. It's because you have very few actors supplying the product and the barriers of creating a similar product are too high, so new competitors cannot access the market. Then the current suppliers can sit on the product and wait for it to be at the right price, as long as it doesn't go to waste.
As you can see, all of this screens about real estate:
This is the time when governments should intervene and come up with a proposal to solve the cartelization.
We have a solution, it is called anti trust legislation. We need to break up all of these too large to fail organizations. It’s ridiculous that we have only a handful of major players in soo many markets.
Yes, of course we do. We just need politicians willing to do that. I thinks that's the most difficult part.
Uh, that organisation is generally City Hall.
The anti trust act is a federal law… I’m not sure where you inject city hall with breaking up cartels or large multinational businesses.
Oops, the businesses bought the politicians and now they won't pass anti-trust legislation. Who could have seen this coming???
_Looks at Anti Trust legislation that was passed over a hundred years ago and scratches head.
Sherman Act 1880 Clayton Act 1914 Federal Trade Commission Act 1914_
We don’t need new laws, we need people appointed to the FTC who will enforce the law more aggressively.
Yeah, and what happened to that legislation? Businesses bought the right politicians and defanged everything that inhibited their profits. Businesses have their thumbs on the scale making sure the FTC doesn't have the right people to be a threat.
That's just capitalism honey
Yes and no. Capitalism without regulations may bring this kind of issues. But capitalism with regulations shouldn't. The issue is that the required regulations are not being applied or do not exist.
We should not blame or put the weight of the issue in capitalism, when we clearly know we don't live in a perfect capitalistic world, and very few markets are like that. The issue is with politicians.
Capitalism destroys its own regulations because politicians are for sale! You're acting like politics and markets are different, but they're interconnected at their very core.
Don't blame capitalism for something that's at the core of any political system: Greed destroys it. Greed and humans are intertwined. It's not capitalism's fault. The same happened across history even when and where capitalism didn't exist: the Egyptian empire, the Roman Empire, the Soviet block and even in China now. Greedy people that can be bought will exist everywhere. The wish for power is not inherent of capitalism, is inherent of human nature. Failing to see that will lead to the same issue over and over again, in democratic or autocratic regimes.
That's wrong. In many countries boomers possess a truckload of the estate, but they don't expect to sell it because it's their life insurance.
It's not cartel or collusion, it's how society was planned by the libs over the last 50 years.
"Planned by the libs", as if the "libs" were a single entity that have a homogeneous plan. Let's stop giving entity to stuff that never existed and realise that there is a structural problem that occurred because of bad management of our economy and policies. Because we had mediocre actors and in some cases actors with bad faith.
That's what I call the libs: it's not an entity, it's the politicians with this ideology. Feel free to turn that into a conspiracy.
Are you making up a special magical definition for "libs"? Good luck with that.
It is a bad thing! How are investors holding on to dozens of empty units at ridiculous prices supposed to get a return on investment if the market's oversaturated with living spaces?
Looks like we're gonna have to start tearing them down to reduce supply.
It's a problem for people who indebted themselves to buy those homes with a valuation based on scarcity. Also a problem for the real estate Chinese companies, sector which represents a quarter of Chinese economy.
Sounds to me like China is trying to solve both of those problems by lowering property scarcity - if this stays controlled it will make properties cheaper so people don't need to acquire as much debt and it will shrink the real estate sector. Since this housing is built through centralized control and not a market, it should be totally under control.
Obviously something unexpected could happen that blindsides the Party, but it looks like politics is in command and everything is proceeding as expected.
I take it you didn't read the article.
To me, this seems wasteful. I'm not very familiar with the Chinese real estate market however.
There should always be a reserve supply of vacant properties to give people freedom of movement between regions and cities.
This might be overkill:
That doesn't actually mean there are 65 million surplus properties. A vacant house isn't an unnecessary house. Children move out all the time, families sometimes break up, Chinese citizens currently living overseas or in Europe return home, etc.
I bet there's actually math for this - I wonder if anyone has calculated the optimal amount of vacancies?
That is a very good point. I still find it hard to believe that they are making the best use of labor and materials with situations like this:
Sometimes, you misspeculate. Some developers lost a whole fuck ton of money on the project, but that's more than made up for if you can turn a profit on projects near big cities (which demand is still sky high for).
Is anyone? If I have to choose between "housing shortage" and "housing surplus" I know which society I would prefer.