What India Should Learn from China’s Property Market Collapse

China is going through one of the most difficult economic crises in history. The crash in China’s property market over the past year has sounded alarm bells. What started as trouble for the Evergrande Group is now snowballing into crisis around the world. China’s housing market is now seen as a “national threat,” the think tank reported, citing The New York Times.

The impact of the property market crash on India and what we need to learn from China’s economic crisis. An expert will decipher it.

Gurmeet Singh Arora, National President of the Indian Plumbing Association, said Chinese investors are certainly looking to other emerging markets, including India. “This will have a positive impact on the Indian real estate market and further spur growth. Rapid urbanization of India, 4700 listed Amrut 2.0 cities, Make in India programme, massive metro rail implementation. A large focus and construction of interconnected cities on highways and bridges, and a large focus on infrastructure have all led to increased urbanization and consumer spending, which drives demand for both residential and commercial real estate. is on the rise,” said Gurmeet Singh Arora.

He added that investors expecting higher returns are shifting funds from Chinese developers to Indian developers.

Chinese property sales fell 72% last year in a property market that accounts for nearly 30% of China’s GDP. RPS Group partner Suren Goyal said the lesson India should learn from China’s crisis is that investment vehicles driven by ignorant social norms often come at a high cost to both people and the economy. Second, corporate debt build-up may initially indicate accelerated growth, but in today’s volatile, uncertain and chaotic market conditions, it all collapses at once. There are risks.

Home sales in China are down 60% year-on-year, and the continued decline (11 months) is seen as the worst in the country’s history. Ajay Rakeja, president of commercial real estate at Berkshire Hathaway Home Services Orenda India, said there could be a long-term impact on global growth prospects, slowing the initial recovery in markets such as India. says there is.

“If China’s twin crises trigger a prolonged slowdown in China’s property market, India’s brisk iron ore exports, much of which is destined for China, could take a hit.

What we have to take out of China’s crisis is that Indian developers must critically assess their financial risks and rethink their business strategies to become more robust in the current economic climate. That’s it.

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