How Many Ghost Cities Are There in China?

[cobran20 104]

link

[Swaize 10]

My mother told me after visiting China that many of those ghost towns are sold out, meaning people actually bought those appartments and are looking to move in a few years down the road.

 

Personally i see it as a real estate boom. Prices will collapse and speculators will pull out their capital and many appartments will stay vacant for 5 years. Same has happened in Spain after 2007.

[cobran20 104]

My mother told me after visiting China that many of those ghost towns are sold out, meaning people actually bought those appartments and are looking to move in a few years down the road.

 

Same here. Apparently a lot of the dwellings sold to foreigners are also empty. This should be discouraged by the government as it does not add to the supply of properties available for rental.

[cobran20 104]

What a waste. Perhaps they can give it to Westfield to manage!

 

Enormous Shanghai shopping mall is now China’s largest empty building

[tor 99]

Same here. Apparently a lot of the dwellings sold to foreigners are also empty. This should be discouraged by the government as it does not add to the supply of properties available for rental.

Just out of interest why should it be discouraged? They build some stuff they intend to use in 30 years. Seems good planning in some ways. Reduces the burden on government and so on. Granted not a plan I would make but it seems like it could be a viable plan if enough of society agreed it was.

[cobran20 104]

Just out of interest why should it be discouraged? They build some stuff they intend to use in 30 years. Seems good planning in some ways. Reduces the burden on government and so on. Granted not a plan I would make but it seems like it could be a viable plan if enough of society agreed it was.

 

The main selling point for allowing foreign investment as I recall being spruiked by the government was that it would increase the supply of rental dwellings, helping to keep rent prices down.

[Mr Medved 44]

Just out of interest why should it be discouraged? They build some stuff they intend to use in 30 years. Seems good planning in some ways. Reduces the burden on government and so on. Granted not a plan I would make but it seems like it could be a viable plan if enough of society agreed it was.

If you take a Lean manufacturing view it is waste - complete opposite of just-in-time.

 

There are also significant maintenance costs to stop the buildings falling into disrepair.

 

I would describe it as a misallocation of capital, I guess the question to ask is, if they didn't build it, how would they invest?

[tor 99]

I agree with the misallocation of capital idea in terms of "could it be used better for the world" (however an awful lot of investments would fall into that category). I guess I am mostly surprised at Cobran saying "the government should..." I thought you were definitely in the camp of "less government regulation is better"

[cobran20 104]

I agree with the misallocation of capital idea in terms of "could it be used better for the world" (however an awful lot of investments would fall into that category). I guess I am mostly surprised at Cobran saying "the government should..." I thought you were definitely in the camp of "less government regulation is better"

 

If the intention of the government was to increase supply, then they should follow up to ensure the policy works.

I also never said no government action. Residential housing, unlike other asset classes like shares, gold, etc, is very sensitive as it is shelter for the population. This is one area where governments need to be careful.

[tor 99]

So far, worldwide, it looks like any kind of government attempt at house price / supply control is pretty unexpected in results

[cobran20 104]

So far, worldwide, it looks like any kind of government attempt at house price / supply control is pretty unexpected in results

 

It's the unfortunate nature of large bureaucracies - very reactive.

[Swaize 10]

And from Mozambique, Africa i heard that chinese buildings collapse even faster than the mud and twigs buildings of their ancestors haha

[Mr Medved 44]

Build quality is poor just about everywhere. So that's one reason why I'm thinking of a Russian "Stalinka" flat and doing a total renovation. Often they are reinforced concrete with 60cm of brickwork. They were built to last 125-150 years.

 

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