China: High GDP, 64 million empty apartments.
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Re: China: High GDP, 64 million empty apartments.
#2Re: China: High GDP, 64 million empty apartments.
#3Nicely done video, but I think it gets the story wrong. The bubble is not illogical to start with. Thanks to currency controls most people have no way to invest outside China. The Shanghai stock market meanwhile has huge problems with adverse selection (bad companies pay to list -- successful companies list in Hong Kong or the United States).
There are no property taxes in most of China, so people with money park it in real estate. And developers keep building these assets because they're insulated from loss in any case. If you're connected you can get zero/low cost loans. And local governments are complicit because they make money "selling" the land and don't have alternate income sources.
So no-one really cares if someone builds a massive complex and it doesn't sell: the government and developers are covered by the bank, and the bank is covered by the Central Government. This is just a distributional game in which China pays for infrastructure by using public policy to inflate bank earnings and then banks approve questionable local projects. And sometimes these things make a lot of money, so it isn't as if they're taking a hit on every single complex.
Re: China: High GDP, 64 million empty apartments.
#4Give the empty apartments to poor folk. You solve the high income inequality and property bubble at the same time ;)
Re: China: High GDP, 64 million empty apartments.
#5>> There are no property taxes in most of China, so people with money park it in real estate.
Exactly the case in India. Most people there park money in real estate. Also in the suburbs the official land value (determined by govt) is far less than the real market value. So investing in that kind of land is way to park black money (or corruption money).
The usual real estate factors like rent-to-own don't apply, Infact the prices in the suburbs of even a 3rd tier small city like Coimbatore is more than that in a major US metro!
Re: China: High GDP, 64 million empty apartments.
#6Give the empty apartments to poor folk. You solve the high income inequality and property bubble at the same time ;)
Whenever that happens in China, the "poor" folk who actually get the free apartments aren't always poor.
Welfare fraud is not unique to the US.
Re: China: High GDP, 64 million empty apartments.
#7An article in SF Chronicle provides some good perspective on these vacancy rates in China to backup this video: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/07/07/...
Even in the huge industrial cities of Shanghai and Beijing the vacancy rates of approximately 50% and 35%. The peak for the US during the recession was 18.5% in Michigan.
Re: China: High GDP, 64 million empty apartments.
#8Can't view the video from here in China, but...
I've noticed lately developers/local govt tearing down buildings after evicting tenants, then canning the new building project ("running out of money", maybe), instead turning the land into a carpark. This creates more demand for unsold apartments nearby, (as well as giving vehicles somewhere other than footpaths to park on :).
Re: China: High GDP, 64 million empty apartments.
#9How many apartments are vacant in the US, just as a comparison, does anyone know? That would make the number much more meaningful.
Also, are these apartments dirt cheap and do they speak english in these areas at all? Maybe they could be a haven for startups, which are somewhat less bound by geography, if they were extremely cheap. I might just be dreaming though.
Re: China: High GDP, 64 million empty apartments.
#10Can't view the video from here in China, but... I've noticed lately developers/local govt tearing down buildings after evicting tenants, then canning the new building project ("running out of money", maybe), instead turning the land into a carpark. This creates more demand for unsold apartments nearby, (as well as giving vehicles somewhere other than footpaths to park on :).
Or the development was found unsafe (after a number have already fallen down), or they realized that the permissions were not done correctly (or at all).