What to learn from China’s real estate debacle

When the government in China shifted policy, speculation ran rampant.

In this edition of RealTrending, Steve Murray, senior advisor to RealTrends, talks about possible parallels between the China real estate crisis and possible implications of proposed government regulations, innovative financing services and people challenges.

Here is a small preview of today’s RealTrending interview. The transcript below has been lightly edited for length and clarity:

Steve Murray: It begs the question: Are there any policy frontiers at the federal or state level that would put a crimp in housing? Well, we don’t know what Washington DC and the politicians who govern our country are going to do with the new Biden tax and spending plans, but, in some cases, there are indications they want to heavily tax well-to-do Americans. How heavy that becomes, no one knows right now.

We know from past cycles that, when that happens, it will tend to put a crimp in the investment in real estate as people shift to other asset classes based on higher marginal tax rates.

It behooves people to pay attention to what’s going on, because what happened in China when the government shifted policy is that there was rampant speculation in housing that suddenly got curtailed. All of a sudden, their markets are in a free fall. It does give you pause.

RealTrending features insight into the brokerage industry. Twice a month, Steve Murray, senior advisor to RealTrends, shares trends he’s seeing and conversations he’s having with real estate brokers and affiliated industries. Hosted by Steve Murray and produced by Elissa Branch.