China's Real Estate Bust Leads Other Countries
2025-02-13 09:25:00 ET
Summary
- Bubbles may seem fun on the way up, but they’re universally brutal in the inevitable deflation stage.
- China’s stimulus boom helped inflate global demand and real estate prices after the 2008 recession, but mean reversion has been in motion since 2020 and counting.
- Policy interventions to avoid price discovery and arrest market clearing only prolong the pain. This is a heads-up for Canada and other countries where real estate mania was also a national obsession from 2009 to 2022.
Anyone who plays Monopoly can experience how quickly real estate holdings drag once cash in hand proves insufficient....
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