I don't know what is it with the Chinese mindset when it comes to property transactions. Its the same all over the world. When you look at the way their minds think, there is a lot of wishful thinking, hope and other fuzzy notions that have no place in a cold hard property transaction.
Look at the PRC failures of Evergrande, Country Garden, etc. The people who bought presale uncompleted apartments from them are wiped out. How does the presale work in China. First, a developer like Evergrande will pre-sale a project. before a hole is even dug in the ground, people are already lining up to put down their deposit. In China, the developer does not put your deposit into a trust account with a lawyer. They just take and use it. Also, after you buy the pre-construction unit, the bank will lend you the money (lets say 80%) and your mortgage clock starts running even though your unit is no where near completion. So the developer has been paid, and the bank now starts collecting mortgage payments from the buyer. So, what incentive does the developer have to complete the project. Non of course, and that is why u see all these half build apartment blocks. I have made business trips to china and some of the people there I deal with have bought these sort of apartments. They point out to me skeleton building structures and say their unit is there. Of course, I look at it, and I know it will never be completed. The concrete is already starting to get black mould on it. Of course, the rest of the world is thinking, how fucking stupid can these people be. Paying upfront for something that is not even close to being completed. But yet, millions do this. They would rather carry the mortgage and the tremendous risk that the developer will stop construction instead of buying an existing resale unit. Its a groupthink.
Then you look at sinkies, and its the exact same groupthink.
We own the flats. No you don't. You are the tenants.
We willingly pay property tax every year. Even though you are not the owner.
etc.
Must be something to do with chinese genes
Look at the PRC failures of Evergrande, Country Garden, etc. The people who bought presale uncompleted apartments from them are wiped out. How does the presale work in China. First, a developer like Evergrande will pre-sale a project. before a hole is even dug in the ground, people are already lining up to put down their deposit. In China, the developer does not put your deposit into a trust account with a lawyer. They just take and use it. Also, after you buy the pre-construction unit, the bank will lend you the money (lets say 80%) and your mortgage clock starts running even though your unit is no where near completion. So the developer has been paid, and the bank now starts collecting mortgage payments from the buyer. So, what incentive does the developer have to complete the project. Non of course, and that is why u see all these half build apartment blocks. I have made business trips to china and some of the people there I deal with have bought these sort of apartments. They point out to me skeleton building structures and say their unit is there. Of course, I look at it, and I know it will never be completed. The concrete is already starting to get black mould on it. Of course, the rest of the world is thinking, how fucking stupid can these people be. Paying upfront for something that is not even close to being completed. But yet, millions do this. They would rather carry the mortgage and the tremendous risk that the developer will stop construction instead of buying an existing resale unit. Its a groupthink.
Then you look at sinkies, and its the exact same groupthink.
We own the flats. No you don't. You are the tenants.
We willingly pay property tax every year. Even though you are not the owner.
etc.
Must be something to do with chinese genes
