Related in more particular terms in North American real estate... ?
China risks also exist only in the internal sense of China's economy running into headwinds... Just as a recession in the U.S. has always been thought of as more important to others... we catch a cold, they get the flue... the same is true of China now...
But, look at what's happening now in Vancouver, B.C. ? The flow of new Chinese money that has been inflating real estate in many places, has been drying up. In Canada, that's a dual function, first, of having China working harder at trying to throttle the ability of Chinese people to get money out of China... to places and in forms that make it harder for China to retake control of them... but, second, given China is seeking to punish Canada, in particular, due to the Huawei issues, and Canada's cooperation with the U.S. in addressing the legalities.
The combined impact is likely to be defining both a market peak... and a sudden and long term shift in the underpinnings of those real estate markets that have been most affected. Vancouver, B.C. is a pretty obvious case in point, due to the relative size of the impact in a smaller city... but, San Francisco, and New York... probably not insulated from that in their own recent "slumps".
We've seen similar events before... as with Japanese money in the late 80's/early 90's... but, the scale of the effects in the recent market changes are of another order of magnitude entirely. As economic "malaise" in China is being understated in magnitude already... and as it seems they've got little capacity to address the problems they have now, even before the full extent of them is known, and before the path likely to be followed is well mapped... it is not unreasonable to expect that "MORE" is very, very likely.
It's way too soon to be looking for "bargains" in real estate... but its also not clear yet that the bubble machine that's been driving events since before 2008... is going to quit churning soap out into bubbles anytime soon.
China's own economic forecasting saying that it will be 18 months or two years before things will reverse in the trends there. I'm skeptical that they've got a proper understanding of the nature and scope of the risks... that they know what the downside limits are... or that they've got much real ability to alter from the course that's been committed to, and the events set in motion already... even if they wanted to...
And, have ignored the trade war / currency war / economc war risks in the prior discussion... but can't ignore them in the real world. There could be real drama coming if things don't pan out in a way that enables... gradual enough change so that changes agreed aren't overly disruptive... so that adaptation to change occurs easily.
We're living in a world with conflicting forces... both inflationary and deflationary. Thus far, inflation has been relatively understated... unless you're looking at the inflationary impulses that appear to have been channeled into assets, as a function of "money flows" having been directed to benefit only relatively few in society... We've seen that as growing income inequality, the hollowing out of the middle class... and the rich getting richer... while left looking for ways to put their new found wealth into "storage" in the form of assets that might survive what's coming... The market function is broken... so traditional "investment" isn't a safe bet. The view of it as a Fed driven event here... is that it is "the everything bubble"... but, certainly not the "everyone" bubble... Inflation hits where the money flow goes... and avoids places the money avoids... so, asset bubble... in pretty much everything... except for those things that compete directly with the Fed's own "control" being suppressed.
The real estate market is in a bubble along with other asset classes...
That doesn't obviate the potential utility in innovations that might enable enhancements of the asset class in things like... greater liquidity... enhanced market access to a vastly larger number of potential participants ?
Worth studying what the combined impacts are likely to be... how the market might be impacted by the changes that are possible. But, I'm expecting it might create some significant opportunities for participation... without thinking that it will be able to prevent a bubble that's been inflated from being deflated. I expect initially it will be more about niche utility in enhancing actual market functions... in one corner of the larger market... when the entire market has been experiencing only the opposite trend for a considerable period of time.
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