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A Fifth of China’s Homes Are Empty (2018)

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Re: A Fifth of China’s Homes Are Empty (2018)

#81

Post by spyckie2 »

james_s_tayler wrote: post #73
ksec wrote: post #66

To put things into context. 1. These are Urban Homes. 2. There are roughly 20M people jumping to new cities and Urban areas every year. For years China has keep a roughly two years buffer zone, I think the rate of new housing is the same and rate of people going into Urban has declined, so a slight increase in terms of buffer ( closer to three years now ). 3. Most of the "Ghost Cities" do get fill up quickly, once th…

America is also a developing country. It's not like anywhere is ever finished developing.

"developing country" is a term used in economic discourse to mean something rather specific -> https://en.wikipedia.org/wiki/Developing_country. It has pretty specific criteria what qualifies, and America (the richest country in the world) does not.

Re: A Fifth of China’s Homes Are Empty (2018)

#82

Post by sonnyblarney »

ethbro wrote: post #79
sonnyblarney wrote: post #68

Earlier quoted context omitted.

The central authorities control the central bank, the banks, and perhaps importantly: the press. And of course policy/taxation. So they can stop a lot of rampant speculation through a variety of measures, meaning hopefully, they can kill any bubble-like blowups. As you say, there's a lot of poor folks and a lot of empty homes, maybe that does mean a haircut for home owners, but it might possibly be done in a way that…

I'd say the danger for China is not being unable to handle a consumer bubble. As you've pointed out, they have a lot of tools. It's their not recognizing they're creating a government supply bubble. The real weakness of demand economies historically hasn't been their difficulty producing basic things (that they feel are necessary), but knowing when to stop producing things. Absent free market signals, there's not a l…

That's a great point, that said, I'll bet they're aware of the problem you mention :)

But macro-macro I see China going the very same thing Germany/UK/France, then Japan, then Korea did after WW2: they all rebounded to a certain degree and did so with nationalist fervour where applicable, and then kind of softened as they stopped having as many kids... and the kids lost the hyper passion their parents did.

China is almost there with a lot of this, and soon it won't matter what they do, there's a limit to the demand for their stuff, they can only build so many homes, and they're having fewer babies, and those babies don't want to be slaves.

China is 1980's Japan, just a lot bigger.

Re: A Fifth of China’s Homes Are Empty (2018)

#83

Post by pascalxus »

spyckie2 wrote: post #80
ksec wrote: post #66

To put things into context. 1. These are Urban Homes. 2. There are roughly 20M people jumping to new cities and Urban areas every year. For years China has keep a roughly two years buffer zone, I think the rate of new housing is the same and rate of people going into Urban has declined, so a slight increase in terms of buffer ( closer to three years now ). 3. Most of the "Ghost Cities" do get fill up quickly, once th…

Articles about ghost cities are a fascinating read - sometimes exploring un-intuitive facts, like having 50m empty homes in China, yields a surprising discovery of the underlying systems. In this case, I think the system perfectly justifies having 50m homes empty. If you look at it another way, if San Francisco (arguably another booming localized economy) had the same initiative to build a 20% buffer for housing, it…

SF residents are nowhere near rich enough to afford the struggles. Even people in the top 2-5% struggle desperately to afford housing, renting out every bedroom in the house just to afford to stay there.

Re: A Fifth of China’s Homes Are Empty (2018)

#84

Post by Arn_Thor »

ksec wrote: post #66

To put things into context. 1. These are Urban Homes. 2. There are roughly 20M people jumping to new cities and Urban areas every year. For years China has keep a roughly two years buffer zone, I think the rate of new housing is the same and rate of people going into Urban has declined, so a slight increase in terms of buffer ( closer to three years now ). 3. Most of the "Ghost Cities" do get fill up quickly, once th…

Very important point. A common way of measuring China's surplus housing stock is by "months of sales". Housing inventory actually peaked back in 2015 at nearly 28 months of sales. It's now back at late 2013 levels of a little over 23 months of sales. Nothing to be alarmed about, even if it rises a little.

Re: A Fifth of China’s Homes Are Empty (2018)

#85

Post by Arn_Thor »

mdasen wrote: post #64
50656E6973 wrote: post #17

For context, it's been estimated that there are around 18M vacant homes in the US, though it's difficult to find a reliable source for this information. https://www.google.com/search?q=how+many+vacant+homes+are+th...

I think a crucial piece of information missing (maybe you have it) is the age/condition of those homes. The US has a lot of vacant homes in low-opportunity areas that are reaching the end of their first usable life and need a lot of money out into them to bring them up to standards. I’ve heard that China has been building a lot of new property that isn’t being inhabited. Those two cases are a bit different. https://w…

It's not even speculation. Urbanization is an ongoing process. Those properties will be filled. Whether or not the developer is liquid enough to hang in there until they do is irrelevant from a societal point of view. That's all numbers and loans. People will inhabit those homes in a few years and the local communities will thrive and generate economic growth

Re: A Fifth of China’s Homes Are Empty (2018)

#86

Post by Arn_Thor »

FooHentai wrote: post #22
hodder wrote: post #19

While problematic in the short term, the scale of urbanization and decreasing domicile density alongside rising GDP/capita will allow China to eat through the slack inventory in the coming years. They are adding about 1 NY metropolitan area worth of urban dwellers per yr: https://www.statista.com/statistics/278566/urban-and-rural-p... Urban region Rural regions 2017 813.47 576.61 2016 792.98 589.73 2015 771.16 603.46…

Maybe, if you consider that trend line to be a stable one that'll just keep progressing upwards on the chart. But that doesn't seem to be a sure thing. Also, the state of some of these buildings is worth noting - Much like Nail Houses, there's a significant portion of these developments that were made to sell for investment purposes alone, and are not going to be suitable for habitation.

Source on that, please. Sure, the construction work can be shoddy (though it's improved a lot in the last five years, and unsold property in CHina right now is usually younger), but it's absolutely livable

Re: A Fifth of China’s Homes Are Empty (2018)

#88

Post by sct202 »

hodder wrote: post #19

While problematic in the short term, the scale of urbanization and decreasing domicile density alongside rising GDP/capita will allow China to eat through the slack inventory in the coming years. They are adding about 1 NY metropolitan area worth of urban dwellers per yr: https://www.statista.com/statistics/278566/urban-and-rural-p... Urban region Rural regions 2017 813.47 576.61 2016 792.98 589.73 2015 771.16 603.46…

There must be a lot of vacant/abandoned homes in the countryside with such a rapid shift.

Re: A Fifth of China’s Homes Are Empty (2018)

#89

Post by epynonymous »

denimnerd42 wrote: post #54
OscarCunningham wrote: post #24

It doesn't make much economic sense that these houses are empty. Why not rent them out or sell them for whatever the market will bear?

there are no such thing as houses in urban china. these homes are apartments you basically get on a 40 year lease. when the lease is up the govt pays you to move out. also, when you buy an apartment in china, it's not finished. there's no flooring, paint, appliances, etc. the price of a finished one is the same or less as an unfinished since the new owner will usually redo the interior. so a lot of these new apartmen…

several corrections, apartments are typically leased for 70 years, 40 is for commercial property which are sometimes inhabitable.

some apartments are finished, these days it’s more likely you’ll find a fully finished apartment, ready for move in, but they do have the unfinished apartments, but it’s too much trouble and trending down lately.

you’re right about the investment aspect, i believe in early i used to rent an apartment in downtown shanghai, 2 bedroom, 1 bathroom, roughly 100 sq m (1000 square foot) new apartment, fully furnished with 60 inch led tv, furniture, etc, that cost me about 6k rmb a month (1000 usd a month), to buy would have cost me about 4m rmb (670k usd), i had pretty good relationship with the landlord, her father owned about 20 similar apartments in the complex, they were from a small town.

Re: A Fifth of China’s Homes Are Empty (2018)

#90

Post by seanmcdirmid »

ksec wrote: post #66

To put things into context. 1. These are Urban Homes. 2. There are roughly 20M people jumping to new cities and Urban areas every year. For years China has keep a roughly two years buffer zone, I think the rate of new housing is the same and rate of people going into Urban has declined, so a slight increase in terms of buffer ( closer to three years now ). 3. Most of the "Ghost Cities" do get fill up quickly, once th…

2. There are empty homes in 10 year old complexes in Beijing and Shanghai.

3. Many of the ghost districts never fill up before they are torn down as eye sores. Kangbashi will only fill up if coal makes a big come back, which is highly unlikely. Tianjin financial district is mostly a bust so far, but a derelict building or two for a decade is not abnormal.

The problem is really simple: China lacks a property tax, so housing is seen as a speculative investment rather than just a place to live in. And China is not wanting for speculators.

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