China: Its vacant 65 million houses.

[GoFlyKiteNow]

China’s vacant housing enough for 200 million

The GDP value boosting real estate activity by the regime planners has now produced an acute oversupply of office and residential premises.

A recent report from the State Grid Corporation of China (SGCC), a power grid corporation owned by the State Council, says 65.4 million houses in 660 cities across China have had zero electricity consumption for six months in succession.

These houses, assumed to be vacant, can hold an estimated 200 million residents.

Mao Yushi, a prominent Chinese economist, pointed out that property market bubble is caused by the vacant housing ratio, and not by the property cost. Even in tier-two or -three cities, if this speculative trade continues, there is bound to be a sharp increase in vacant houses and an eventual housing market bubble.

After the global financial crisis of 2008, exports, China's main growth engine have fallen sharply. With factories closed and manufacturing diminished, GDP and economic growth figures were boosted by the regime by boosting real estate construction using the stimulus funds.

With this massive oversupply, the disturbing question is - what happens in late 2010 and 2011 onwards ? Where will growth come from to avoid massive job losses and stalling of the economy.

How will the GDB figures be sustained and maintained ?
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[Ash007]

Tier 1 properties in Beijing, Shanghai, Shenzhen would still hold its value.

 

[zuoom]

i thought it was the other way round? Tier 1 to go down. Tier 2 n 3 to go up.

question is by how much. 1 down a little or a lot?
and 2/3 up by how much...

 

[jw5]

They still don't allow foreigners to buy property right?
Only citizens and those who at least a 1 year employment pass.

 

[wuqi256]

They still don't allow foreigners to buy property right?
Only citizens and those who at least a 1 year employment pass.

Heard from somewhere you could actually as i was at one time rather interested in property there in Xiamen. A friend of mine has a property there in the outskirts of Shanghai.

 

[jw5]

Heard from somewhere you could actually as i was at one time rather interested in property there in Xiamen. A friend of mine has a property there in the outskirts of Shanghai.

If you are not a citizen or on employment pass, I think you need to be a joint owner with a prc national. But I'm not sure if that is correct, so if anyone knows, please clarify. Thanks.

 

[eatshitndie]

you (lazy lame losers) can always look up the china law blog:

http://www.chinalawblog.com/2007/02/foreign_ownership_of_real_esta.html

look under paragraph 4...

"The opinion has one limited exception to its no foreign ownership rule and that is for residential real estate as a personal residence. This exception is limited to Representative Offices or to foreign individuals who have been legally resident in China for at least one year while employed or as a student. These foreign individuals are limited to one residence."

 

[longbow]

China has no decent housing prior to 1980. What you had then was crowded, poorly constructed flats with lousy plumbing, electrical. EVen then many live in m&d brick homes.

In that light there is real need for housing. With population of 1.4B and rapid increase in prosperity, many are looking for decent housing. Then you factor in lack of invesment choice and high savings rates, what happens is people start using prop as bank account.

Quite similar to people who buy plots of land for future development. There is alos little to no property tax in China so cost of holding prop is small (not much opportunity cost).

So what we have are those with $$ buying a few pieces of prop for investments. All need to put in high downpayments so this is not a subprime issue like in the US.

I look at current slump in prop prices as good time to buy well located assets. Look at London, NY, Tokyo, HK - all major financial centers. Shanghai will be in that league within the next 10 years. Its GDP and mfg base is such that billions if not trillions will need to be raised to fund its mfg and growth. Just imagine a wealthier pop and the needs for consumer finance, pension systems, investment instruments.

Look at property prices in those cities and you can see why if have money now is a good time.

65 M vacant homes is peanuts

 

[manokie]

65 M vacant homes is peanuts

What are you talking about?

If there are EMPTY 65 mil homes to house 10% of the population (assuming 3 per house hold), don't you think it's a serious problem?

This means that many people are deprived of the chance to purchase their own housing due to spectators holding on to the 65 mil homes!

 

[longbow]

GFK - must put disclaimer mah.

Your article is from Epoch Times - a Falunggong owned media. So naturally biased. Better to quote from mainstream sources - Economist, Bloomberg, WSL, Business Time. And if quoting from biased source must at least link so that reader knows where it is coming from.

Else it is misleading.



http://www.theepochtimes.com/n2/content/view/39092/

 

[eatshitndie]

http://www.propertywire.com/news/as...y-up-to-20-in-coming-months-201007074287.html

"...a report earlier this week from Changjiang Securities suggested that Shanghai’s new home sales fell 70% from a year ago in June. While a report from Uwin Real Estate Information Services said that sales of new homes in the city fell 57% in the first six months of the year, the lowest in five years. But it found that new home prices rose 48% from a year earlier."

law of demand and supply: prices go up, sales come down.

 

[GoFlyKiteNow]

GFK - must put disclaimer mah.

Your article is from Epoch Times - a Falunggong owned media. So naturally biased. Better to quote from mainstream sources - Economist, Bloomberg, WSL, Business Time. And if quoting from biased source must at least link so that reader knows where it is coming from.

Else it is misleading.

http://www.theepochtimes.com/n2/content/view/39092/

Sometimes using logic and cold reasoning can be a better guide than believing official statistics.

The official data put out by the state media on the economy is often questioned by various independent media us unverifiable and suspect. Sometimes too good to be true. Example the 11.9 % growth figure for 2009. Whereas the figure is reckoned to be close to 5 %. Even Bloomberg, Washington Post, WSJ, are hesitant to believe them.

In this context, observers have to use indirect data to make logical conclusions. Example: Last year the economic growth was claimed to be 11.9 %, which was doubted by the fact that overall national electricity consumption fell during the same period ! - ( Put out by the by the same state media )

While you may have different view on this, the fact remains there are many overseas investors who would benefit by some skepticism in their investment decisions and save them from getting burned horribly due to looking though rose tinted glasses.

65 Million empty houses is not peanuts.. Even 10 Million is a matter of concern. Because such overhang in a heated property bubble can have really serious consequences in the form of an uncontrollable melt down. And if that happens, it will have serious consequences across the region from stock markets to economies.

A good logical analysis is a better alternative. For the last few years, the text book analysts and investment gurus from all over the globe was asserting the "fact" that China was powering the global commodity market and thus helping other nations have higher prices for their commodities. In a way the view was right. But not analytical enough. The fact remained that the West provided the market to China in the first place. Which enabled China to export and which enabled it to buy commodities from other nations.

Hence the real driver of the global economy was not China at all. It was the USA and Europe. But the perception was the opposite , thanks to half baked financial and economic analysts and their pack mentality syndrome.

Why is there a need to mention this.?. Well, if I am a investor and watching for signals, I would have monitored the Western markets and their economies as the starting point while making investments in the commodity markets as well as other affiliated markets.

Instead, thanks to the warped half baked text book analysts, millions of investors looked at official data from China to make their investment decisions and the outcome we all know now. Today commodity prices are half their prices and demand is still shrinking. Ask the Aussies and Indonesians !!
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[Ash007]

Eh why do you guys even want to buy property in China, you can only hold it for 70 years. Worst then in Singapore leh. Unless you buy and dump.

 

[GoFlyKiteNow]

Eh why do you guys even want to buy property in China, you can only hold it for 70 years. Worst then in Singapore leh. Unless you buy and dump.

Economist Andy Xie Writes:

Chinese stock and property markets have bubbled up again. It was fueled by bank lending and inflation fear. I think that Chinese stocks and properties are 50-100% overvalued. The odds are that both will adjust in the fourth quarter. However, both might flare up again sometime next year. Fluctuating within a long bubble could be the dominant trend for the foreseeable future. The bursting will happen when the US dollar becomes strong again. The catalyst could be serious inflation that forces the Fed to raise interest rate.

Chinese asset markets have become a giant Ponzi scheme. The prices are supported by appreciation expectation. As more people and liquidity are sucked in, the resulting surging prices validate the expectation, which prompts more people to join the party. This sort of bubble ends when there isn’t enough liquidity to feed the beast.

[...] In summary, the market frenzy now won’t last long. The correction may happen in the fourth quarter. There could be another wave of frenzy next year as China can still release more liquidity. When the dollar recovers, China’s property and stock market could experience collapses like during the Asian Financial Crisis.
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[zuoom]

Andy Xie is a known guy to put down China's stock n property. in the last couple of years, he has been rather vocal about it.

 

[Logisex]

The core issue is that it is very difficult to track how many properties those rich faggots have as China has no central property registration system. The only tracking system is through the PBOC credit system which records all loans processed thru the banks including mortgage. So if they are paying by cash, there is absolutely no records at all literally. So how would property policies work if you can't even track the owners. It is not uncommon to see people taking a full luggage of cash to property sales office.

 

[jw5]

The core issue is that it is very difficult to track how many properties those rich faggots have as China has no central property registration system. The only tracking system is through the PBOC credit system which records all loans processed thru the banks including mortgage. So if they are paying by cash, there is absolutely no records at all literally. So how would property policies work if you can't even track the owners. It is not uncommon to see people taking a full luggage of cash to property sales office.

Do robberies tend to happen near property sales offices in China?

 

[Logisex]

Do robberies tend to happen near property sales offices in China?

Not that I know of.