If everyone left holding at the end is going to be a loser, then maybe it really is a property 'ponzi'.
The business model is simple. Sell 'off the plan' apartments to finance more 'off the plan' apartments. It works, so long as the property prices keep going up and the numbers of people wanting apartments keeps increasing, because even if the property developer is unprofitable, they can use the money from newer investors to finish building the apartments of older investors, and keep up the facade going that they are a legitimate business.
How can they get away with it? On the one hand, the government wants to create jobs and prosperity, and the one sure fire way to do that is through construction - so they keep relaxing lending standards. On the other hand, as more jobs in construction and other sectors open up, people move from the farms to the urban centres for work, pushing up the demand for new apartments. Also, once the trend starts it doesn't seem to stop, until you get a 1990 Japan type scenario.
Then the question is, why, as a society, would we encourage what is a essentially a property 'ponzi' scheme? Pick your theory. Maybe, we see how rich the initial investors get and want to get a piece of the pie, even if it ends up being a bit smaller than theirs. Maybe, we like moving to the cities and becoming a cog in the 'machine' and producing lots of things, because it seems more attractive than the laborious life of a farmer. Who knows?
Whatever the case, the apartment block building 'machines' like Evergrande have been running pretty much full tilt for the last 20+ years. Theoretically, when enough apartment blocks have been built, Evergrande and other property developer's useful life will end and society will stop 'fueling' them with more money. I don't see why China, or any country, is immune from a Japan type scenario. The only difference being on how the government deals with it in the end.
If the Chinese government lets the price of property go down, it could be decades before people's appetite for property returns. However, if there is already an oversupply of property, then trying to keep the 'machine' going, or trying to restart it, so to speak, with trillions and trillions in 'stimulus', could be an utter waste of capital and resources. Furthermore, it could signal that the Chinese government is more interested in 'welfare' for the rich rather than for the workers.
At least we don't have to wait too long to find out.
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If everyone left holding at the end is going to be a loser, then...
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