If a housing bubble existing in the USA collapsed international markets in 2008, would a housing bubble occurring in Asia, Australia and New Zealand collapse international markets in the near future?
Why do I ask?
When I visited China last month, I learned that an apartment in Beijing and Shanghai costs $10,000 USD per sq. meter. Yeah, whoah! Not only this, but the inflation rate is so high that investing in real estate wouldn’t have paid off.
When in Qingdao, I witnessed a decades worth of infrastructure and I can’t put this observation into words…. 11km tunnel, 15 mile bridge and modern buildings 25 times the size of Hartford constructed within 10 years to accommodate a population that significantly overpowers US residents.
I have an economics professor staying with Annette and I via our AirBnB this week. Naturally inclined to learn more about his work, I read 2 of his articles:
1) Article on housing prices from 2015 (Take a look at the figure on Page 17): http://www.ntu.edu.sg/home/qfeng/FengWu_20150206.pdf
2) Article on China’s rapid growth in infrastructure from 2018: http://www.ntu.edu.sg/home/qfeng/FengWu20180423paper.pdf
If a housing bubble exists in asian markets and the system collapses… I personally believe this will have greater impact on international trade for the US markets at a time when interest rates are rising and trade wars are developing.
This could crush the lower and middle working classes in the US and the record low employment rate might see its worst reversal of my lifetime.
Housing prices are not increasing significantly in the US and company earnings are still positive, but something tells me that the threat lies elsewhere.
None of us are fortune tellers; especially not me, but i’d love some feedback if this interests anyone reading. Your thoughts please.
