What’s In Store For China’s Mortgage Market? | Seeking Alpha

This post by Michael Pettis offers an interesting and detailed perspective on some of the features of the Chinese apartment financing model that make it highly leveraged in ways that I at least had not fully appreciated. In particular, the Chinese apartment buyers pay in full prior to construction of their apartment but the developers seem to have free reign to use that financing outside the strict confines of building the apartment the buyers have paid for.

The Economist “Money Talks” podcast also has an episode going over the same ground.

Both recommended.

Tony – From the Outside

Author: From the Outside

After working in the Australian banking system for close to four decades, I am taking some time out to write and reflect on what I have learned. My primary area of expertise is bank capital management but this blog aims to offer a bank insider's outside perspective on banking, capital, economics, finance and risk. View all posts by From the Outside