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Originally Posted by 10023
What’s that valuation based on? Because Chinese real estate is about to hit the skids in a big way (and probably has already, but it will take a while for the data to leak out). Chinese real estate and especially Shanghai has been a massive bubble for years.
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I don't know what it's based ON but I know the valuation is from the last handful of months. My in laws paid probably no more than $200K for these 2 properties combined and they're worth around $1.5M total. Even if the property values halved from right now, they could still over triple their money from when they originally bought them.
Yes, the market in China has been insane for a long time and way out of reach for most people there. If we think what happened in some places in the US is crazy - just look to over there relative to the median income. I think the median home price in some good districts right now in the big cities is literally something like 25X the median income. My in laws had some friends who kept waiting it out 20 or so years ago and the prices went so insane that they never were able to afford buying anything, while my in laws said screw it and were able to buy multiple properties despite having similar paying jobs as their friends. Solidly middle class and yet their friends still cannot afford to buy something decent even 50 miles from the center of the city.
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Anyway, that’s not the point. The point is that the only way to make highly desirable neighbourhoods cheaper is not simply to build more housing, but to make them less desirable. So you can actually build your way to affordability, but only by building so much affordable housing that affluent people don’t want to live there anymore. It’s a bit of a scorched earth approach, of course.
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Have you actually ever been to those areas in Shanghai that are full of "commie level high rises" in person, recently, or are you just looking at photos of the high rises from the 10th floor on up? Because I have been to these areas, multiple times - my in laws' neighborhood has some of that going on (their area are midrises though) maybe 5 minutes walk away and it's not what you think on the actual ground level.
Some of these areas are full of pretty nice restaurants that are just as nice as your average downtown Chicago restaurant (not the Michelin starred ones but the regular but decent places). My in laws have a cobblestone street full of restaurants and shopping a 5 minute walk away. it's right in the middle of those "commie looking high rises." Their neighborhood also has many parks, grocery stores, and even zen gardens and ponds with tons of greenery. It's far from not desirable and even though it's basically as far as Crystal Lake is from downtown Chicago, it has streets that have just as many restaurants on them as parts of the core of Chicago.
if you've never been to some of these areas in person and are only looking at pictures of a bunch of not great looking, identical high rises then you'd get the wrong idea about how some of them actually look at the ground level in the districts.
Pretty typical "suburban" district in Shanghai where I linked this to in the video:
https://www.youtube.com/watch?v=Nq08bvLp2mM&t=700
A look into what it's like in the middle of one of these high rise districts in a non-first class city:
https://www.youtube.com/watch?v=0Tfl6O85jfM&t=290
Also funny since we just moved back (my wife never lived in Chicago). This last weekend we were on Belmont Ave in the Southport area eating. My wife randomly said "these buildings remind me of China" and then told me all the 4-5 story non descript newer condo buildings on the north side of Chicago remind her of some areas of "second class suburban cities" in China. Not a bad thing but a funny remark from her. Years ago in South Loop she made a similar remark asking me if the South Loop was designed by people from China.
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