cdr108
Senior Member
I see what you are saying, Eug. However, one could also argue that a bubble bursting in China will cause investors over there (who are forced/decide to sell) to lose a lot of money. This will in turn hamper their ability to invest abroad. One could also argue that if people begin having financial difficulties the first thing they would sell are their foreign assets. Kind of like selling the cottage in Muskoka first instead of the primary residence (not the best analogy).
to add to that thinking, what are the rules for mortgages in China?
are they non-recourse like the US or recoursable (sp?) like in most of Canada?
IIRC in the 1990s, a sizable portion of the HK population owed more than the value of their property and left many with negative equity, and requiring them to sell in an unfavourable market.
if the same were to happen now, the Chinese foreign owners in Canada might have to repatriate funds back home.
just look at the Vancouver market during that time ... quick and dramatic price drops !