China macro

[treasurehunt]

13 hours ago, Dalal.Holdings said:

 

Weird how everyone in China invests their capital in real estate and the CCP didn't think that maybe it'd be better if they got people more interested in their stock market

 

 

Don't disagree with your point, but this chart shows real house prices and not nominal. I doubt many homeowners care about inflation-adjusted prices. The chart of nominal prices isn't pretty either, but not nearly as bad.

 

[zippy1]

13 hours ago, Dalal.Holdings said:

 

Weird how everyone in China invests their capital in real estate and the CCP didn't think that maybe it'd be better if they got people more interested in their stock market

 

Try google "國進民退"。 People are saying today's China exhibit something similar to what happened in 1950s. Be careful over there.

[nsx5200]

The situation is even worse.  In China, the land for these real estate buildings are "leased" for 70 years(see wiki), so when the Chinese citizens "buys" residential property, they're merely buying the building/unit, and not owning the land.  For those that follows real estate development in major cities like New York, in the long run, the building/unit is worthless as they will eventually be teared down and rebuilt.  But every rebuild is typically more dense/higher.  So in the long run, all the value is in the land whereas the building itself is more or less worthless.

 

So for the Chinese citizen "owning" real estate, there is a forced 70 year depreciation that can not be mitigated away.  That's why a lot of Chinese citizens will actually buy real estate in Democratic countries like Canada or United States where the real estate is a more legal "permanent" purchase(there's the annual taxes, but at least if you pay that, you get to keep the land).  The CCP's solution to this, of course, is to heavily restrict capital outflow.  Roach motel for capital.

 

70 years translates to 1.43% a year.  20 years translates into ~30% in this type of "depreciation" already.  Compared this against the appreciation typically found in Democratic countries.  The result is stark.

 

When Buffet says that many of us won the ovarian lottery, he's not joking.  It is truly a privilege to be born into countries that are Democratic where the rules are designed for the benefits of the people.  Many rights we take for granted are simply not there in non Democratic countries.

[Dalal.Holdings]

 

 

 

[Spekulatius]

On 4/29/2026 at 1:47 AM, treasurehunt said:

 

Don't disagree with your point, but this chart shows real house prices and not nominal. I doubt many homeowners care about inflation-adjusted prices. The chart of nominal prices isn't pretty either, but not nearly as bad.

 

I actually think we would be better off if our home price chart looked like that too.

[treasurehunt]

1 hour ago, Spekulatius said:

I actually think we would be better off if our home price chart looked like that too.

 

Yes, I agree. Living in San Diego is a constant reminder of unreasonably high home prices.