The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: The Wharf who wrote (30658)	5/4/2005 11:04:04 AM
From: Elroy Jetson	Read Replies (2) of 306849

I've mentioned this previously. A long-time friend of mine in the real estate development industry, who speaks both English and Mandarin, has been working for a Chinese developer primarily in Shanghai for the past three years. When he was back in Los Angeles a couple of months ago we asked him about what he has seen in China. In his words, "its a house of cards." He told us of massive over-capacity in infrastructure like empty factories which continue to await businesses to fill them, to residential projects which are purchased with debt by people who are wholly incapable of making the payments for long. Everyone in the Chinese real estate development business expect China's growth to bail them out at a large profit. He said it's like California in 1989 times ten. Rather than an inflation in labor costs, he expects a major decline in asset prices with a comparable rise in bad loans. .

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