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What Can Possibly Go Wrong: In China Homes Are Offered "Zero Money Down"

Tyler Durden's picture


How is China, which as we explained yesterday just completed a very bearish "head-and-mutated-shoulders" formation in its "gloomy" housing market and where the entire economy is threatened with imploding into a hollow house of cards (built in one of the Chinese ghost cities no less) because according to SocGen "the aggregate exposure of China’s financial system to the property market is likely to be as much as 80% of GDP", dealing with the threat of a housing market, and thus economic, and thus global depression? Here's how.

From Global Times:

East China's Fujian Province has eased curbs on home purchases amid a cooling pro­perty market, China Business Journal (CBJ) reported Monday, ­citing industry insiders.


Fuzhou, capital of Fujian Province, saw its home sales in terms of floor areas more than halved as the average home price more than doubled over the past five years, stock information portal reported on Monday.


This news came after media reports of massive home price discounts in cities like Hangzhou of East China's Zhejiang Province and Changzhou of East China's Jiangsu Province.

The punchline:

Since March, 20 property developers in Guangzhou have been offering "zero down-­payments" to attract buyers, in addition to large discounts and tax refund, the National Business Daily reported Monday.

In other words, "please take this home: it's free."

What can possibly go wrong?


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Wed, 05/14/2014 - 12:37 | 4759448 Mr. Delicious
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Wed, 05/14/2014 - 12:39 | 4759464 Buckaroo Banzai
Buckaroo Banzai's picture

NINJA loans from the home of the Ninjas! The circle is complete.

Wed, 05/14/2014 - 12:42 | 4759484 kliguy38
kliguy38's picture

Won Tu Lo

Wed, 05/14/2014 - 13:13 | 4759608 max2205
max2205's picture

Just think...50,000 little Chinese babies were born today

Wed, 05/14/2014 - 13:29 | 4759673 zerozulu
zerozulu's picture

Chinese houses are made of bricks and concrete and our houses are made of Chinese cardboards. there's will be still standing when loan will be paid off. we will have a pile of rubble when we retire.

Wed, 05/14/2014 - 13:36 | 4759696 eatthebanksters
eatthebanksters's picture

Of course there is no bubble..never was.

Wed, 05/14/2014 - 13:41 | 4759714 PTR
PTR's picture

Bullish for upcycle industry.

Wed, 05/14/2014 - 13:40 | 4759708 PTR
PTR's picture

Just think...50,000 little Chinese babies were born today


Chicken McNuggets.

Wed, 05/14/2014 - 21:05 | 4760485 Boxed Merlot
Boxed Merlot's picture

…50,000 little Chinese babies were born today…


I remember listening to the NCR salesman Ira Hayes, (not the American Indigenous person who participated in the Iwo Jima flag raising), who made the rounds of the mid 80’s motivational speakers circuit allude to this very important point.

“Customers”, he said, just “keep on coming.”


It always struck me as the reason why deception, wonder and excitement are so easily marketed by crusty old fools hell bent on concealing their own nefarious activities, the beauty of Creation and the concept of Freedom from those they believe to be their “inferiors”.


I take solace in the ZH tag line “On a long enough timeline, the survival rate for everyone drops to zero”, … “but after this the judgment”. (Hebrews 9:27b)





Wed, 05/14/2014 - 15:58 | 4760300 walküre
walküre's picture

How many Chinese kicked the bucket yesterday? Increased pollution, undersupply of calories, not enough females .... extremely bad for the demographics. Who would immigrate to China?

Wed, 05/14/2014 - 12:52 | 4759528 NihilistZero
NihilistZero's picture

Ninja's are Japanese, I would think they are enemies to the home of Shaolin Kung Fu...

Anyone still thinking the Chinese are ready for World Hyperpower status isn't paying attention.  At least our crumbling infrastructure is old...  The cultural corruption is already collapsing the "Chinese Miracle" economy.  I live in the SGV region of SoCal that has been invaded by ChiComs.  These guys fled for a reason.  Though I do look forward to them losing their freshly bought Bubble 2.0 shacks via executive order once relations with China get to hot :-)

The banksters giveth and so shall they taketh away.

Wed, 05/14/2014 - 12:56 | 4759544 Jumbotron
Jumbotron's picture

So what they are giving away free houses.  As long as we give them our business....and our dollars.....then nothing changes.

Only after the prols realize that what we have is a confidence scam.....and there is no confidence left.....then the hyperinflation explosion followed by the deflationary crater will take care of this situation.....and ours.

But only after the dust clears and enough blood is shed from the war to follow.

Wed, 05/14/2014 - 13:23 | 4759643 jaxville
jaxville's picture

In Canada the banks were allowed to insure "no money down" mortgages since 2004. By 2008 over 400 billion worth of those mortgages had to be taken off the banks books. The government agency that insured the mortgages created a MBS which the banks were able to market to get liquidity as a goodly portion of those mortgages are non performing.

  Exposure to Canadian real estate has been directly transfered to the tax payers.

Wed, 05/14/2014 - 14:31 | 4759908 robertocarlos
robertocarlos's picture

It is topped out at $600 billion. That's like only 200k per functioning taxpayer.

Wed, 05/14/2014 - 13:25 | 4759652 nuclearsquid
nuclearsquid's picture

Disgusting.  zero down debt is like the 'hyperpalatable' food that was discussed here yesterday.

The debt serf masses feel like they are getting something for free, but then figure out that they have been screwed by promising all of their future income (just like a mcdonalds binge gives them ass pissing for the next three days).


Wed, 05/14/2014 - 15:34 | 4760068 Chief Wonder Bread
Chief Wonder Bread's picture

Send mandarin Mel Watt over ASAP

Wed, 05/14/2014 - 15:33 | 4760075 Chief Wonder Bread
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Wed, 05/14/2014 - 13:24 | 4759647 Mr. Delicious
Mr. Delicious's picture

you speak truth.  I mean, the US is fucked, but China has way, way too many people on too little {arable} land.

I think a few people commented on this, forget who, but - the Russian far east is mineral and perhaps oil/gas rich, and very sparsely populated.  Much of it is worthless for agriculture, but a lot is not, a lot is good for grazing and the fishing grounds are considerable. 

Either Russia and China make some sort of deal or a war within 20 years or so seems inevitable.  One might add Mongolia to this mix - huge area, mostly empty, and could not resist a bona fide Chinese takeover.

Interesting times.


Wed, 05/14/2014 - 13:16 | 4759619 BlindMonkey
BlindMonkey's picture

"NINJA loans from the home of the Ninjas! The circle is complete."


You meant well.

Wed, 05/14/2014 - 12:40 | 4759459 Mercury
Mercury's picture

I'm pretty sure a zero money down, interest only mortgage is the same thing as renting...except that you're now counted as a "homeowner".

Wed, 05/14/2014 - 13:06 | 4759577 Lost My Shorts
Lost My Shorts's picture

No, no, wrong you are.  You are now counted as an investor.  Make the payments for a few months, and when the price goes up 30% (which it always does), flip it for an easy profit.  ROI is very high.

I have no money, so put me down for three !!

Wed, 05/14/2014 - 13:25 | 4759629 Handful of Dust
Handful of Dust's picture

I'll take a Baker's Dozen....I mean, what can go wrong?

Anyway, why would anyone buy there when they can buy up moar of Kornifornia and Texas? The last 4/7 houses sold in my little area were for cashola to some Chinese families.Gee.


Wed, 05/14/2014 - 12:38 | 4759460 666
666's picture

Free? Ain't good enough. I'll wait for a better deal.

Wed, 05/14/2014 - 12:38 | 4759461 youngman
youngman's picture

This is Chinas savings account....if the people lose that...there goes their middle class..

Wed, 05/14/2014 - 12:48 | 4759510 RagnarDanneskjold
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Central Bank Worried China's Mortgage Slaves Will Walk Away; Bank Exec Says Houses Overpriced; Banks Unwilling to Lose Money; 1.23 Trillion of Household Deposits Leaves Banks in April

For all the doom and gloom headlines in the Chinese media though, prices are still basically flat. The cuts have almost entirely been on new buildings.

Transaction slowdowns, inventory buildup and cuts to existing home prices are definitely pointing in the direction of big trouble. Interest costs are equal to 40% of developer profits, Real Estate Agencies Are Downsizing, and home ownsers regret not selling sooner. This is why the PBOC sent a political message to the banks the day before.

Wed, 05/14/2014 - 12:53 | 4759533 RagnarDanneskjold
RagnarDanneskjold's picture

Oh BTW, China has subprime too. Credit guarantee companies pay the down payment for poor Chinese people. And credit guarantee companies are set up by people with lots of cash sitting around, like steel traders who used their steel as collateral.

Wed, 05/14/2014 - 16:06 | 4760320 walküre
walküre's picture

from one of your links...


Before the Spring Festival, Li Jing to the house to hang out. "Initially listing, psychological expectations reserve price is 2.4 million, but hung up 2.6 million listing price, want to be able to sell another job selling high. Owners me upstairs hanging 2,650,000 it." Jing said that during the Spring Festival to the Ching Ming Festival She also feels the market state, there were 2.4 million buyers want to buy, she did not agree.

But I did not expect, after the Ching Ming Festival, the market becomes more sluggish. View room buyers either "rambling look," or is "do not fly to bargain." Until May 6, she finally hit a pair of "fly" buyers, the price is negotiated 2280000. "Mental somewhat regret, the festival will be able to sell 2.4 million." Jing said.

Because lots of listings Jing still good, and belongs to the school district room, sold relatively easy. And another recent hang out Tongzhou two suites of second-hand housing owners Zhao Jie (pseudonym) feel more market chill. Within two weeks, only one suite had a client once seen, and there is no intention to buy.

Sounds awfully painful to be a real estate "investor" in China now and for the forseeable future. Of course many here understood this since 2010 when the first images of ghost cities and ghost malls emerged.

All the commodities were bid up like crazy because the Chinese were building like there's never anymore building allowed in the next decade.

I've said it before. The Chinese take the cake as "real estate" morons.

Wed, 05/14/2014 - 14:57 | 4759994 california chrome
california chrome's picture

" in 35 major cities new residential supply of 21.38 million square meters, an INCREASE of 10.2% MONTH-OVER-MONTH, this is the highest single month increase in supply this year, indicating that the market is gradually speeding up the rhythm of bringing properties to market."

Wed, 05/14/2014 - 12:44 | 4759475 Mr. Delicious
Mr. Delicious's picture

Well, on the upside, once the CIA starts ramping up its destabilization efforts in China's west/northwest, there might be a lot of people looking to relocate.

We ought to give them plane fare to Detroit.

Thu, 05/15/2014 - 01:08 | 4759866 napper
napper's picture

I don't think the CIA has ever stopped or scaled back its destabilization efforts in China, or anywhere else ... Ukraine, Russia Syria, Libya, Iran, Sudan, Yemen, Nigeria, Congo,  Cuba, Venezuela, N.Korea, Pakistan, Vietnam, Thailand, Burma. And why not, China and Japan are subsidizing US subversion efforts with their purchases of US treasury bonds. On top of that, the US can print free money at will.


Back to Detroit, I've heard the Chinese are moving in already. They are saying that Detroit is similar to run-down Chinese cities after the Cultural Revolution or the Chinese Civil War.

Wed, 05/14/2014 - 12:42 | 4759483 Relentless101
Relentless101's picture

For fuck sake. The chinese are even make our housing bubbles now.

Wed, 05/14/2014 - 12:42 | 4759485 qazwsx
qazwsx's picture

its like leasing/buying a car in the U.S. 0 down, 0 first month payment, 0% apr. 

Wed, 05/14/2014 - 12:42 | 4759486 MuleRider
MuleRider's picture

Was that photo taken somewhere in Beijing?  Or Harlem?

Wed, 05/14/2014 - 13:28 | 4759667 cowdiddly
cowdiddly's picture

They should have hired a few Saudi Pilots to hit the buildings with aircraft so the jet fuel and office furnishings would get hot enough to melt the steel and the buildings will collape straight down instead of that mess.

Wed, 05/14/2014 - 13:53 | 4759766 StandardDeviant
StandardDeviant's picture

Great picture!  Are there any Mandarin speakers on this list who can translate the characters on the tops of the buildings?  (Yeah, yeah, I know: "Ho Lee ...")

Wed, 05/14/2014 - 16:22 | 4760372 Boxed Merlot
Boxed Merlot's picture

who can translate the characters on the tops of the buildings?...


I'm not sure, but I think it says something like "now reduced..."

Wed, 05/14/2014 - 12:43 | 4759487 BandGap
BandGap's picture

Always trying to understand - they want people to go in to debt to save the country from going into debt, but since the people in debt can't pay their debts where does that leave the country with it's debt?

Wed, 05/14/2014 - 12:45 | 4759502 i_call_you_my_base
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Wed, 05/14/2014 - 14:23 | 4759882 Mr. Delicious
Mr. Delicious's picture

simple, they just get a loan from the IMF.

With just a couple of "conditions."

Look to what was done to Russia under Yeltsin...  actually, what Putin managed to do was remarkable and laudable.  He's basically taken shit for disgorging the oligarchs and rolling back US NGO influence. 

This doesn't mean there is no corruption in Russia - it is rampant. 

But less than what it was, and the Russian people are less fucked and robbed by the usual suspects than they were in 1998, or for that matter, 1918.

Wed, 05/14/2014 - 16:17 | 4760354 Boxed Merlot
Boxed Merlot's picture

where does that leave the country with it's debt?...


"There you go again"

 I sometimes wish those with intelligent questions would kindly leave the thinking to the Drs. and Nobel laureates among us.  It gets quite tiresome to weed these threads out of the massive information gathering we’re paying the government to do on our behalf. 



Wed, 05/14/2014 - 12:43 | 4759493 i_call_you_my_base
i_call_you_my_base's picture

Don't worry...

"Watt also announced he was loosening rules that have forced banks to buy back billions of dollars worth of flawed home loans they sold to the two mortgage financiers, a move designed to spur the housing market."

The US is headed back there.

Wed, 05/14/2014 - 12:52 | 4759517 1stepcloser
1stepcloser's picture

How much for role shitty...   Central Planning special, everything must go

Wed, 05/14/2014 - 12:50 | 4759518 corporatewhore
corporatewhore's picture

What's the climate like?  I'm looking for an ex-pat location

Wed, 05/14/2014 - 13:00 | 4759553 Peanut Butter E...
Peanut Butter Engineer's picture

Fuzhou has Good climate just like Florida hot and humid, due to its proximity to Taiwan it was labeled potential war zone therefore the region was never choose for any earlier manufacture locations which resulted in its good air quality. Like wise whoever buy a place there be prepare to know were your bunker is located you will be needing it anytime Taiwan and China have a major spat. Did I mention it has good air quality?

Wed, 05/14/2014 - 16:08 | 4760332 walküre
walküre's picture

L.A. has good air quality compared to Beijing. No, thanks.

Wed, 05/14/2014 - 13:20 | 4759631 BlindMonkey
BlindMonkey's picture

Call Simon Black.  He is the man of the world with a dozen passports on every continent.  He will give you the hookup.  /s

Wed, 05/14/2014 - 13:55 | 4759772 StandardDeviant
StandardDeviant's picture

I'm guessing very, very foggy.

Wed, 05/14/2014 - 14:05 | 4759815 napper
napper's picture

It's not fog; it's a combination of smokes from coal fired power plants, American/European/Japanese/Chinese factories, legal / illegal burning of various stuff by Chinese residents, and dessert / sand dusts due to deforestation during the Mao era.

Wed, 05/14/2014 - 16:09 | 4760334 walküre
walküre's picture

Maybe they're burning people. Mass cremation plants. Who'd know any different?

Wed, 05/14/2014 - 12:51 | 4759526 Kirk2NCC1701
Kirk2NCC1701's picture

Meanwhile, here in the US, my car dealer is offering "Zero Down, Same Monthly Payments" if I trade in my car.

Wed, 05/14/2014 - 12:53 | 4759538 Atomizer
Atomizer's picture

China is punting the beach ball back to Janet Yellen. 

Wed, 05/14/2014 - 13:00 | 4759558 Peanut Butter E...
Peanut Butter Engineer's picture

Here we go again moar subprime loan!!

Wed, 05/14/2014 - 13:12 | 4759605 nowhereman
nowhereman's picture

It is my understanding that they do things differently in China.  The banks don't control the money supply and run the government like in the USA.  So, maybe, because I really don't know, they have a plan that will work.  After all they kill the fraudsters over there, while here in the US they get elected President, and are appointed to head the Department of Justice and the Treasury, et. al.

Wed, 05/14/2014 - 13:33 | 4759688 icanhasbailout
icanhasbailout's picture

No money down? I'll take all you got!

Wed, 05/14/2014 - 13:40 | 4759705 localspaced
localspaced's picture

Would not want to live in China if they paid me. Same goes for any sane person. Bearish on everything China except the food (except for that glazing thing they do..fuck that)

Wed, 05/14/2014 - 14:22 | 4759877 epicurious
epicurious's picture

you don’t really want to eat anything grown in China.  Last time I visited there 30,000 hogs floating in the river and I saw plenty of locations food was grown in roadside ditches and other areas where there was sewage run off.

Wed, 05/14/2014 - 13:42 | 4759715 Fix It Again Timmy
Fix It Again Timmy's picture

It hasn't gotten to the point where you can get Home Titles in a box of cereal - close, but not quite there.....

Wed, 05/14/2014 - 14:20 | 4759867 Otto Zitte
Otto Zitte's picture

Rait! Preaze stay! Re rill tleat you betirr. Rook! Flee intirrnet!

Wed, 05/14/2014 - 14:24 | 4759887 robertocarlos
robertocarlos's picture

Nice to see the Chinese knocking down those old buildings to put up new ones over-night.

Wed, 05/14/2014 - 15:13 | 4760062 Arthur Two Shed...
Arthur Two Sheds Jackson's picture

If it comes with one of these Chinese broads in the ads on here, I'm in.


Wed, 05/14/2014 - 15:17 | 4760085 honestann
honestann's picture



Not much of anything else to say... except virtually no place on the planet has a natural, healthy economy any longer.  The planet is completely run by predators.

Wed, 05/14/2014 - 15:48 | 4760267 Ser Bronn
Ser Bronn's picture

Who the hell would want those "homes" any way!

Thu, 05/15/2014 - 10:16 | 4762439 RadioactiveRant
RadioactiveRant's picture

The UK used to offer 100% mortgages. Their economy is growing 1.3%, the towel folder has produced an election miracle!

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