Cyprus-Forum.com

[Lordo]

China's property market's been a disaster zone for years.

https://www.economist.com/leaders/2022/ ... lsrc=aw.ds

For any general interest I'd cut and paste the article but................................. you never know who's hovering over their keyboard.

We are talking home ownership ..... not screw ups by a government that builds accomadation where no one lives ..... hoping to redistribute the population by getting them to move. I believe these are often offered for free to people willing to move and to companies that build production units in these regions ..... the govt will even build the factories for free!

Multiple home ownership in Chinese cities: An institutional and cultural perspective

Abstract

China is a country of homeowners, where >80% of households own their homes and >20% of urban households own multiple homes. China achieved this unprecedented high rate home ownership in a short period of three decades.

https://www.sciencedirect.com/science/article/abs/pii/S0264275118318201#:~:text=China%20is%20a%20country%20of,short%20period%20of%20three%20decades

But the Chinese don't have to borrow from private banks! This is how they have virtually taken over in Africa.

Chinese have a good trick up their sleeve. They do not have to use force like the yanks to take over. They offer a country infer-structure like road, bridges, railway line, airports etc for free, knowing that there are resources' in the ground yet untapped and when the time comes, the country remembers what the Chinese done for them and hence treat them favourably.

This is not how the Yanks do business is it?

[Maximus]

Another issue is here;

With the State as the holder of the collateral ..... they can leave you in the property with you as part owner based on what you have already paid for, and you just pay what the State decides you can afford. This continues to pay off the mortgage and you continue to live in your home.

What if they cant pay what the state decides after the fact of being approved for the loan?

What if the amount they can pay is far less than what is a reasonable repayment for the property over the duration of the loan?

I will refer you to a case in Cyprus back in 2013, where lots of people took out loans they couldn't afford or had no intention of paying back. Knowing full well that legislation existed to protect them from foreclosure.

It led to an economic collapse and other people footing the bill with a haircut and losing their uninsured money held as deposits at the banks.

How does the government being the lender and landlord solve the mortgage issue in your system when the "buyer" can never lose?

Instead of the banks being the "robbers", you will create a system where the people "rob" the government and everyone eventually loses.

[Robin Hood]

Another issue is here;

RH said ..... with the State as the holder of the collateral ..... they can leave you in the property with you as part owner based on what you have already paid for, and you just pay what the State decides you can afford. This continues to pay off the mortgage and you continue to live in your home.

What if they cant pay what the state decides after the fact of being approved for the loan?

The property never belongs to them and the State then charges them a monthly fee for maintenance (RENT!) If they fail to pay that, they get chucked out and take what they are offered ..... which will be far less than what they had.

What if the amount they can pay is far less than what is a reasonable repayment for the property over the duration of the loan?

There is no 'loan period'. You pay what you can afford, if you get a new job with more money, or grannie dies and you get a share of her estate ....... you can either, piss it up the wall and have a good time or pay off your debt so the house becomes yours much sooner than it would have done. Conversely, if you hit hard times your payments can be reduced but it is still your home.

I will refer you to a case in Cyprus back in 2013, where lots of people took out loans they couldn't afford or had no intention of paying back. Knowing full well that legislation existed to protect them from foreclosure.

It led to an economic collapse and other people footing the bill with a haircut and losing their uninsured money held as deposits at the banks.

How does the government being the lender and landlord solve the mortgage issue in your system when the "buyer" can never lose?

Instead of the banks being the "robbers", you will create a system where the people "rob" the government and everyone eventually loses.

Not quite how understood the Cyprus 'bail in'! The Cyprus Banks had huge non-performing loans. Their ASSETS, which is the debt they hold was excessive. So they reduced their LIABILITY by paying off the debts of many of their assets with depositor's money and seizing the collateral. i.e. they reduced their MARGIN to a level that was acceptable to the ECB. They also confiscated properties that were unsold by developers, who also had large and often un-serviced debts.

You will note that this has never been tried since on any other EU member? Say Deutche Bank who have the largest loan debt in the EU?

[Maximus]

I dont see how you have solved the mortgage and inflation problem.

You have just replaced the banks with the government and abolished the concept of interest.

With the later being more or less a reality for the last 20 years anyway.

Only difference from what i see now is a "homeowner" who defaults on their repayment can stay in the property at a reduced rate but the government probably wont recover their "investment" to put back in to the economy in the buyers lifetime.

[Paphitis]

Another issue is here;

With the State as the holder of the collateral ..... they can leave you in the property with you as part owner based on what you have already paid for, and you just pay what the State decides you can afford. This continues to pay off the mortgage and you continue to live in your home.

What if they cant pay what the state decides after the fact of being approved for the loan?

What if the amount they can pay is far less than what is a reasonable repayment for the property over the duration of the loan?

I will refer you to a case in Cyprus back in 2013, where lots of people took out loans they couldn't afford or had no intention of paying back. Knowing full well that legislation existed to protect them from foreclosure.

It led to an economic collapse and other people footing the bill with a haircut and losing their uninsured money held as deposits at the banks.

How does the government being the lender and landlord solve the mortgage issue in your system when the "buyer" can never lose?

Instead of the banks being the "robbers", you will create a system where the people "rob" the government and everyone eventually loses.

It doesn't solve inflation.

The Government is the one creating the money through its Central Banking Federal Reserve. It's not the Private Banks. They are getting the data entry from the Federal Reserve and pay an interest to it, which is the official cash rate interest rate they set. The Private institutions then transfer the credit to the borrower who pays the Private institution a slightly higher interest rate.

Which is how the central bank can control borrowing costs buy raising the cash rate.

[Maximus]

Yea, I know how it works,

the process of printing money itself creates inflation.

This is why central banks should be independent of government, otherwise you get a situation like Turkey with inflation running riot and without interest, you have fewer tools to control it.

[Paphitis]

Yea, I know how it works,

the process of printing money itself creates inflation.

This is why central banks should be independent of government, otherwise you get a situation like Turkey with inflation running riot and without interest, you have fewer tools to control it.

they are independent, but the reality is, they also are not.

Central banks are formed by Government, but sipposedly independent and not influenced by Government.

The Chairman is often depicted as more powerful that the POTUS. Probably very true, but the POTUS has Nuclear Weapons.

[Paphitis]

A lot of people also say that the Chairman will be the one that finally destroys Ruzzia and its economy.

Just by permanently isolated the country through sanctions, gas markets, and restricting the goods and technologies they can get which will grind their country and economy down to a pauper.

Already, buying any western or Jap car has become out of reach because no parts, and now they have to resort to junk Chinese junk.

[Paphitis]

As for the mortgage crisis, I don't really think there is one. If there is, the Federal Reserve will sort it by increasing interest rates.

That results in less borrowing by people and business. And it also encourages tightening of belts and debt reduction.

I just think the globe is in a debt reduction phase now, until the ecomonies slow down as spending decreases. It will get to the point where economic activity is curtailed and then the Federal Reserve will enter a phase of interest rate decreases and the cycle continues on and on like it has for the last 100 years.

[Maximus]

Yea, I know how it works,

the process of printing money itself creates inflation.

This is why central banks should be independent of government, otherwise you get a situation like Turkey with inflation running riot and without interest, you have fewer tools to control it.

they are independent, but the reality is, they also are not.

Central banks are formed by Government, but sipposedly independent and not influenced by Government.

The Chairman is often depicted as more powerful that the POTUS. Probably very true, but the POTUS has Nuclear Weapons.

Yes but Robinhood is advocating a solution to abolish the banks and make them "government agencies" or the government itself as a solution to solve the mortgage and inflation problem.

Basically what erdogan did and he was also well on his way to 0% interest rates.

the results are there for all to see, the people are in pain and can barely afford to eat.