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| First house for a young man |
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| tronde:
--- Quote from: blueskull on July 06, 2017, 08:29:55 pm --- --- Quote from: tronde on July 06, 2017, 08:20:56 pm ---Question to bluescull: I can see why you and your family fear for financial trouble in China. My understanding of the Chinese economy is that it does not follow the "western rules of economy" if you look at the government level because the government as an entity does not see money as a goal in itself. I know that one of the most important goals for the government is to remain in office, and money can be a tool to achieve just that so it is importat that way. But just to save up a huge pile of money is not importat in the same way as it is in the West. So - how big losses for a Chinese citizen or family will they allow? I guess a large group of pepole can be rather difficult to handle if they loose a lot of money because of something as abstract as large scale economy? Will your money actually be more safe in the american housing market than within China? If the Chinese economy really goes bust it will for sure affect most western countries too. --- End quote --- The point is not China is going down, on the opposite, it how it prevents this. China prevents political instability by locking in money within the boarder, so that if someone wants to take arm, others will turn him in in fear of losing their own government issued certificates, such as money, house certificate and car titles. It will make my future investment harder if I plan to stay in US forever, so I prefer to get my money out before the total capital control is in place. That's it. As for economy total collapse and its ripples, I don't see any immediate risk of that. And since US has an average APR of 15% and I have no interest in pure capital investment, I figured that by buying a house it can preserve the value of my money better, at least better than putting it in bank. --- End quote --- Then I understand. Yes, I agree that a house with no loan is safer than the bank. As long as you own both the house and the land (as I understand is your goal) the house will most likely survive a lot of financial trouble. Just make sure you have a proper insurance on it, and don't cheap too much on maintenance. |
| cdev:
You should know that planners, who often are in the know about such things, expect a lot of less expensive neighborhoods to be redeveloped via eminent domain in the coming years as cash pressed towns attempt to increase their tax bases (its likely to be futile, though because whatever systemic problems are happening, to kill malls, etc, are unlikely to reverse themselves for a community that builds more malls where affordable housing used to be. ) A legal decision in 2005 made it legal for towns to take peoples property and give it to developers simply because the developer has some kind of idea that they find attractive. That is I think a huge mistake because its just inviting corruption. If your neighborhood or home is taken by eminent domain its typical for people to get less than their true replacement value for them, also its the pre-improvement value. What you see in China where holdouts manage to stay for years with a big mall being built around them would not happen. In that respect, homeowners" in China (despite them only owning the land for 99 years or whatever) actually have more rights than Americans now. |
| Nusa:
--- Quote from: tronde on July 06, 2017, 08:20:56 pm ---Will your money actually be more safe in the american housing market than within China? If the Chinese economy really goes bust it will for sure affect most western countries too. --- End quote --- Money in cash form almost always loses value, no matter what currency you have it in. You need to invest to keep or gain value. Having assets in more than one market is usually safer than having it in a single market. Even if the house loses value, he still has a place to live and it remains a long-term asset. And property taxes may fall, making it cheaper to live. His family background gives him experience in property investment and management, even if not in this country, so he's not going into it cold like most first-time home buyers. I think he'll do ok overall. |
| cdev:
Tronde, Here in the US it emerged that several banks - big banks, were actively committing fraud so that more people would be foreclosed on so they could take the entire asset. They totally got away with it. It was their word against the banks and the banks got away with it. Even when one very large US bank was forced to pay a settlement, it worked out to around $300 per family foreclosed on. They had paid off their mortgages or made the payments on time they were supposed to - but still lost their homes. How much was their compensation? This was in a case where the bank was officially declared "Guilty" and there was no debate that they had deliberately pretended families who had managed to get their payments in on time, often having gone to great trouble to get that money, had failed to. the bank abused their power and the trust people had put in them to declare them in default and foreclose on the houses which often then went to ruin, not being occupied they became flooded or targets of metal thieves, etc,. often serving as a magnet for homeless people and destroying the value of other homes in their communities.. How much did the banks have to pay for this behavior? So little as to be almost less than nothing. The bank was forced to pay a settlement that worked out to a very small sum, of which the lawyer who brought the class action lawsuit got around a third. The payment was a few hundred dollars per family. |
| cdev:
Blueskull, It seems as if everybody in China are essentially renters then, maybe? How much is the mortgage, rent, etc, that people have to pay in Chinese cities and towns? How large of a percentage of income is it on the average? |
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