64 Million vacant apartments in China!!!!!

[newguy05]

Quote from atticus:

They earn 15% of their US counterparts, yet the average selling price of these Chinese city-apartments is actually higher than in the US. There is no way to make the maths work on those 64MM empty apts. Again, it's as though a US couple earning the average wage is purchasing a $1.4MM condo for cash. It's simply absurd.

5% of the total population (not simply adult wage earners) would need to purchase apartments to fill those 64MM, and they're still building. 7/1000 Chinese millionaires. 0.2% with a net worth of $250k!

Infrastructure stim on a massive scale. When the japanese do a bridge they get toll revenue or fares from high-speed rail. The Chinese are simply building ghost towns.

Everything ends badly... or it wouldn't end.

This is just a blip, as you said columbus oh.. Noone really gives a shit about those places except the western media, to be used for cherry picking. I remember there was another video a while back where they showed a ghost town in the middle of a desert as if somehow that's representative of china's market.

You are right the poor/wealth gap in china is extreme, and many people cannot afford to own homes. But I just dont see what the big deal is if those ghost town in the middle of nowhere remains unsold, eventually the government(with close to 3 trillion usd reserve) will just write a check, "lease" the units as affordable housing and it's done

You will *NEVER* (in the next decade) have a situation in cities that matter like shanghai/beijin, where people can no longer afford and begin mass defaulting on their mortgage, apts become vacant, and banks going under like what happened here. Because:
1) There is simply no leverage over there, all cash deals/50% down.
2) No upkeep: average $500k usd apt in shanghai cost $40/month total(tax+maintenance) vs $1k/month here for a $400k 1br near nyc
3) China has 1.3 billion people and the mass migration to the cities are just underway. The cities are full.
4) Everyone wants to own an apt, west underestimate the resolve chinese have at saving money. They will cut toilet papers to save pennies, then pool 3 generations of saving to buy 1 apt.


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In response to the video, where the guy said owning a home is a human right. That is flat out FALSE, shelter is a human right, owning your own home is a LUXURY, and an expensive one at that. It's only natural not everyone or even the majority should be able to afford it.

The us government tried to give home ownership to everyone by leverage (and we know how that ended). The chinese now is trying by forcing the price to crash(without much success) and/or building affordable homes.

also in the video they are saying the "rock slum" the couple lived in will be demolished for highrises/projects as if that's a bad thing, if it did happen, those 2 will walk away with at least a 6 figure usd tax free, possibly much more. Getting your home targeted for demolishing by the government in china is like winning the lottery...

 

[newguy05]

Quote from myoffices:

I think sooner or later China is expecting some new visitors and a new industry like the dot com boom we had in 2000 . If they can sustain a segment of the young population and attract US and Europeans to china with jobs and opportunity they may be right in the long run. If they can get their economy growing and offer jobs and free airflight I know alot of young techies who would go in a second. Not to mention an apartment in shanghai.

Its a curious situation.

china doesnt want foreign investment in their real estate market, they cant even satisfy their own citizens in the cities. If you dont have a chinese passport you cannot purchase real estate in china except if you can prove you are working there for at least 2(?) years in a legit company.

 

[mgabriel01]

Quote from wilburbear:

Can you send email into China? How?

A news report stated the email system is a closed loop, and is occasionally purged so that you lose all your contacts!

It's not a closed loop
I email people in China all the time

 

[mgabriel01]

Quote from achilles28:

You don't get me. I'm asking how easy it is for a US Citizen to buy US Dollars in China, with Chinese Yuan?

For example, say a US businessman owns a factory in China. He deposits 10 million Yuan into a Chinese Bank in Shanghai. Next, the American businessman wants to buy US Dollars with that 10 million Yuan and transfer that money to Citibank, in America. How difficult is that?

They don't sell US dollars in China

 

[mgabriel01]

Quote from atticus:

The Chinese demographic is akin to the average wage-earning couple in Chicago paying cash for a $1.4MM condo on $70k income.

Entirely do-able with a 99 LTV 3 Year Arm with a 5 year balloon
Where you been?

 

[richie90]

Quote from Grandluxe:

What kind of nonsense is this? Does the USA have a monopoly on the word "police" ? No other country is allowed to call their security forces POLICE?

Grandluxe, .....I think TraderH , just meant to say ... that the Chinese are copycats . and they like to copy the USA in many ways.

 

[mgabriel01]

Quote from richie90:

Grandluxe, .....I think TraderH , just meant to say ... that the Chinese are copycats . and they like to copy the USA in many ways.

Sure, just check the screw-hole on the upper right corner of a hwuawei router

 

[lesserfool]

Quote from hoffmanw:

Analysts used to say that about Pudong too. Now it is filling up.

Here are some changes to consider, occurring now and in the coming decade:
- Wages in China have risen. They are no longer the low-cost manufacturing center.
- Demographics. They have or will be reaching an inflection point soon. The number of young people entering the workforce is starting to decrease.
- It's already overbuilt. Property prices are falling, for once.

I'm not saying they can't keep this going for a few more years. But if something can't go on forever, it won't.

-lf

 

[macroman]

Quote from lesserfool:

Here are some changes to consider, occurring now and in the coming decade:
- Wages in China have risen. They are no longer the low-cost manufacturing center.
- Demographics. They have or will be reaching an inflection point soon. The number of young people entering the workforce is starting to decrease.
- It's already overbuilt. Property prices are falling, for once.

I'm not saying they can't keep this going for a few more years. But if something can't go on forever, it won't.

-lf

agree with above, however ita may go for longer than couple of years if this sitaution benefits them greatly. Example GFC china: US 1:0

 

[OddTrader]

Special factors:

1. Probably the Chinese government is the single largest majority land owner of All the lands in China.

2. Probably the Chinese government (owning many banks, companies, resources and manufacturers besides lands and estates) is the single wealthiest corpoartion (earning the annual incomes from various taxes, rates plus valuable assets) among All the businesses in China.

Then what would the Chinese Government do?

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http://www.internationalappraiser.com/2011/05/beijing-housing-shortage.html

Those who might consider Beijing housing prices to be a bubble, should take note that most bubbles collapse from falling demand or supply increases well in excess of demand, which so far does not seem to be occurring in Beijing. In American housing bubbles, one can observe that the most supply-constricted markets, such as Manhattan or San Francisco, suffer the least depreciation in economic downturns. One thing that prolongs the Chinese Bubble, too, is the lack of property taxes, which makes carrying costs low for real estate speculators. This is starting to change, now, with the cities of Shanghai and Chongqing instituting residential property taxes, with assessment rates ranging from .4% to 1.2%. This could curb speculation, although Chinese investors have few other choices of investments; Chinese stocks are considered riskier investments than housing and are down about 25% this year.

One interesting twist to the Chinese housing market is that all properties are leasehold. The residential land leases from the government are 70 years in length. As is customary with leasehold properties, improvements must be removed by the end of the lease. This creates interesting repercussions for the Chinese housing market. What happens to resale value after a few decades? Will family heirs have considerably diminished hereditary rights to housing? What resale values are possible for older homes nearing the end of their 70-year leases? It will be interesting to watch this grand housing experiment.

"