REAL ESTATE NEWS
Xi Jinping is responsible for popping China’s real estate bubble, according to the Wall Street Journal. In the communist nation, the dictator must preserve authority by accepting responsibility, while saving face by citing the need to moderate the “wild growth of capital”. The real reason for China’s real estate crash is its hidden economic recession caused by global virus hysteria, lockdown, travel bans, over-speculation, tofu dreg construction, extreme pollution and poisoned water supply, capital controls, communist caprice, inflation, electric power shortages, cooked books, hidden debt, business downsizing and cost-cutting, including layoffs. Some properties have recently lost more than 75% of their value.
The paper tiger’s ghost economy has already affected Downtown Los Angeles recently by partially funding the zombie development called OceanWide Plaza, then stalling, and stalling, and stalling — for years. Oceanwide L.A.’s debt has grown to $2.3 billion, as capital from China has continued to get more arid. Creditors just took over one downtown San Francisco property from China Oceanwide Holding Company. Oceanwide had planned to build a two-tower hotel, office, and residential project at 50 First Street, but now there is only a gaping hole in the ground. The company also has troubled projects in New York and Hawaii. | VIDEO
Even an orderly unwinding of the highly indebted property sector carries under-appreciated risks to foreign investors. The long-anticipated default of China’s most indebted property developer finally came true last week. Evergrande Group will have to restructure some of its $300 billion in liabilities, of which $19 billion are international bonds, according to National Review. Evergrande is the most notable in a rapidly expanding snowball of sliding real estate companies that include Fantasia, Sinic, R&F, Modern Land, Shimao, OceanWide and many others.
The price of the average Downtown LA condo has jumped dramatically in the last two months, largely due to the long-term real estate cycle revealing historically low Downtown home prices, a rarity in this new era of inflation.
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Copyright © This free information provided courtesy L.A. Loft Blog with information provided by Corey Chambers, Realty Source Inc, DRE 01889449; MPR Funding Inc NMLS 2000513. We are not associated with the seller, homeowner’s association or developer. For more information, contact 213-880-9910 or visit LALoftBlog.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.
