You're one of the few commenters in this thread who actually gets what's going on.
This is not in any way about the cost of housing in the US. The US real estate market has virtually no impact on capital flight from other nations.
The article completely misses the point, for understandable reasons: this is a domestic Chinese fiscal and political issue, as perceived by CNBC's Real Estate Correspondent.
What we're seeing is the effect of the latest step in tightening capital controls by Beijing, designed to reduce capital flight, something which they've been actively trying to limit, and publicly so, for at least the last three years. The paid lip service to the single biggest factor.
People engaging in capital flight don't care all that much about market prices. Paying more than the value of something is acceptable if the alternative is losing everything. Buying a home and leaving it empty is not a problem. Using it to get in-state tuition so your kid can get a western education is better, but not necessary.
Money laundering fronts will give up profit margin that would be unthinkable in a legitimate business, all in order to turn some portion of ill-gotten gains into something that can be more safely used.
The reason Chinese nationals are buying fewer American homes has nothing to do with America, and everything to do with China. The current American political climate has nothing to do with it, either, unless one's considering America's stability and the international status of the US Dollar (both of which are the surest respective bets on the planet), the two things that make it such an attractive destination for capital flight. It's also an economy in which one can put that capital to good use without much difficulty (relatively speaking).
Beijing swings back and forth between opening up their capital markets, and maintaining domestic stability. That's all this is.
This is not in any way about the cost of housing in the US. The US real estate market has virtually no impact on capital flight from other nations.
The article completely misses the point, for understandable reasons: this is a domestic Chinese fiscal and political issue, as perceived by CNBC's Real Estate Correspondent.
What we're seeing is the effect of the latest step in tightening capital controls by Beijing, designed to reduce capital flight, something which they've been actively trying to limit, and publicly so, for at least the last three years. The paid lip service to the single biggest factor.
People engaging in capital flight don't care all that much about market prices. Paying more than the value of something is acceptable if the alternative is losing everything. Buying a home and leaving it empty is not a problem. Using it to get in-state tuition so your kid can get a western education is better, but not necessary.
Money laundering fronts will give up profit margin that would be unthinkable in a legitimate business, all in order to turn some portion of ill-gotten gains into something that can be more safely used.
The reason Chinese nationals are buying fewer American homes has nothing to do with America, and everything to do with China. The current American political climate has nothing to do with it, either, unless one's considering America's stability and the international status of the US Dollar (both of which are the surest respective bets on the planet), the two things that make it such an attractive destination for capital flight. It's also an economy in which one can put that capital to good use without much difficulty (relatively speaking).
Beijing swings back and forth between opening up their capital markets, and maintaining domestic stability. That's all this is.