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SBS Dateline's Documentary On China's "64 Million Empty Apartments"

Tyler Durden's picture





 

While Zero Hedge readers have long known about the eerie phenomenon known as China's ghost cities (and ghost malls), Australia's SBS' Dateline has done a terrific documentary on the topic of "64 million empty apartments in China." As each passing day brings more confirmation that not only is China's real estate market one massive bubble, but it is also, as expected, completely hollow, both literally and metaphorically. The full brief clip is a must watch for all those who wonder how central planning manages to hit its goal-seeked and manipulated GDP number each and every quarter .We are surprised that in keeping with the Japanese earthquake economic miracle, China has not destroyed the vacant city yet only to rebuild it immediately.

(clip after the jump)

h/t Ian

 


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Fri, 03/25/2011 - 07:47 | Link to Comment Alcoholic Nativ...
Alcoholic Native American's picture

Hey do they actually kick you out of the house for not paying your mortgage in China?  Serious question.

Fri, 03/25/2011 - 08:00 | Link to Comment IBelieveInMagic
IBelieveInMagic's picture

I guess they believe better to build vacant homes with imported commodities before their dollar reserves become completely worthless. 

The structure of the current global financial system aggravates misallocation of resources as everyone is trying to take out more than what they put in. We really need a commodity backed financial system to curb this nonsense... my two cents.

Fri, 03/25/2011 - 08:04 | Link to Comment YHC-FTSE
YHC-FTSE's picture

+1

Worth more than 2 cents. 

Fri, 03/25/2011 - 08:06 | Link to Comment duo
duo's picture

In the middle ages Roman temples were knocked over to get the iron pins that held columns together.  Hopefully, the steel and glass in these structures can be recycled into useful things (like rail cars or bridges).

Fri, 03/25/2011 - 09:08 | Link to Comment Ray1968
Ray1968's picture

This was an excellent piece of journalism!

Fri, 03/25/2011 - 09:36 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

the steel and glass in these structures can be recycled into useful things

How do you say Karptown in Mandarin?  Kunstler would have a seizure if he watched this video.

Fri, 03/25/2011 - 09:38 | Link to Comment G-R-U-N-T
G-R-U-N-T's picture

Interesting that the couple in the brick shack have the idea that government is going to deliver them. They will die of old age waiting on that belief.

Their centralized government know if they don't maintain at least 7% growth civil unrest will definitely ensue.

Fri, 03/25/2011 - 08:24 | Link to Comment DoctoRx
DoctoRx's picture

They pay cash.  Few mortgages.  And they hold.  Little or no property taxes, as I understand it.  They are in that regard an unlevered society, financially speaking.

Fri, 03/25/2011 - 08:50 | Link to Comment EvlTheCat
EvlTheCat's picture

I guess that is why there are 64 million empty apartments.

Fri, 03/25/2011 - 09:15 | Link to Comment RafterManFMJ
RafterManFMJ's picture

No property taxes in China and a flat tax in Russia? Isn't it great how the commies are more capitalistic than the good 'ol USSA.

Fri, 03/25/2011 - 10:15 | Link to Comment tonyw
tonyw's picture

I thought everybody here knew the good 'ol USSA is an oiligarchy with little real capitalism? It's for the benefit of the too big to fails, banks, unions, companies. Bread (foodstamps) & circuses (tv, ipads) keep the masses docile while the oilgarchs continue to extract more and more of the wealth. Things are pretty good financially if you're in the top 10% otherwise forget it. Do you think the FDA is run for the benefit of the people? Medicine? much more expensive than the rest of the world but only 37th best according to the WHO.

 

Vote the bums out? dream on it's a hydra with two heads to distract the voteriat but the same body - the very best government money can buy. I'd bet there's more full time lobbyists in DC than the whole rest of the world put together. See today's post about how little GE pays in tax, lobbying is very cost efficient for the big guys.

Fri, 03/25/2011 - 20:32 | Link to Comment edotabin
edotabin's picture

That first paragraph you wrote very concisely states the present situation. It is all a distraction to keep us on the wheel like a hamster.

There could be 980 billion empty houses in China and it would matter not. They are the world's powerhouse now. The fact that they produce absolute crap (in very large part) makes no difference.

Same thing with the Euro. It is the ultimate scam.  Truth matters not. The ministers of 27 can come out and say "we all strongly agreed" and everything is OK. Greece could be 7 trillion in the hole but some unknown minister could come out and say "the ESF and EU have agreed to new terms concerning Greece" and everything is magically OK.

This is about gaining full control of other countries and eventually sinking America into oblivion. Absolutely, positively nothing else. It all depends upon who controls the money supply and how many restrictions can be placed on them. In the US, technically (an not really practically) congress could end the fed in a heartbeat. In Europe there is NOBODY that can technically or practically do anything to the ECB. They are untouchable.

The end.

My 0.02

Fri, 03/25/2011 - 21:26 | Link to Comment reader2010
reader2010's picture

George Carlin put it this way, 

http://www.youtube.com/watch?v=acLW1vFO-2Q

Fri, 03/25/2011 - 08:27 | Link to Comment I am more equal...
I am more equal than others's picture

Mortgages are rare in China.  I have several friends living in China and they rent 'multi-million dollar' apartments for about $650 US per month.  Do the IRR on that!  My bet is that when this bubble explodes there will be class warfare and to re-direct/deflect that internal conflict they'll play the nationalism card and start a war.  Look to the east, China vs India or China moving east toward oil and gas countries like Iran, Iraq. 

Fri, 03/25/2011 - 08:57 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

According to the municipal statistics bureau on March 15, residential housing sales in Beijing for the January to February period declined 21.1 percent from the same period last year to 1.32 million square meters. At the same time, residential housing transactions in Shanghai fell 31.3 percent year-on-year to 1.9 million square meters. During the first two months, total housing sales including both residential housing and commercial housing projects in Beijing and Shanghai dropped 18.9 percent and 26.7 percent from last year, respectively.

In the past two months, newly-launched housing projects in Beijing totaled 2 million square meters, a 34.8 percent decrease from the same period last year. But residential housing construction increased 14.4 percent year-on-year to 1.8 million square meters.

 

http://english.caing.com/2011-03-16/100237227.html

Fri, 03/25/2011 - 09:14 | Link to Comment kridkrid
kridkrid's picture

Nationalism and start a war:  Agree... especially when you factor in what China's one child policy has created.  Their demographic timebomb is different from ours... they have too many men... not enought wives... time to cull the herd... a ground war would do the trick.

Fri, 03/25/2011 - 10:00 | Link to Comment reader2010
reader2010's picture

Not enough pussies? No problem. When RMB becomes the next reserved toilet paper, those that can't find one can always mail order blonde brides from America and live happily ever after in those empty apartments. Two problems solved.

 

http://img261.imageshack.us/img261/9301/2342868113ccb63f6e6b.jpg

Fri, 03/25/2011 - 20:39 | Link to Comment edotabin
edotabin's picture

So, why is everything in the US a bubble immediately but this Chinese situation continues as if nothing is wrong?

I say because reality went out the window a long time ago. It is probably because the general population is ignorant there and the tricks can still work. 

Basically, the way I see it, the US is cooked because they don't need to buy stuff anymore. What anybody is the US need an extra TV? Another car? Computer? Hogwash. The garages are all full of junk that nobody knows what to do with.

If you make stuff in China (albeit absolute shit) you start spreading money around. The 3-400 million people that don't even have teeth will consume many more things given the opportunity. Add to that the sheer volume of people and voila! The scam continues, so China is now the hottest thing since sliced bread.

 

Sat, 03/26/2011 - 09:15 | Link to Comment FEDbuster
FEDbuster's picture

Central planning allows for tremendous malinvestment.  The capital will continue to flow to "create" jobs.  The story of a Chinese washer and dryer factory shipping washing machines to villages with no running water system was a classic. 

This real estate bubble is promoted with the hope that the avg. Chinese worker will rise to the economic level of the avg. middle class American worker.  The problem is the American worker is more likely to fall to the $6K/year Chinese worker.

Sat, 03/26/2011 - 00:26 | Link to Comment CaveatEmptor
CaveatEmptor's picture

I call b*llsh*t on the assertion that million dollar apartments are going for $600/month. I lived in Beijing from 2006-2009 and I can tell you that premium housing is expensive to rent. Besides management fees there are few carrying costs as there are no property taxes so landlords sit on empty apartments until a lucrative deal comes along. Fully furnished 3BR in a top of the line building would rent for US$3000/month. Serviced apartments would be between $3000-$6000/month. You would be lucky to find a unfurnished 1BR in a top of the line building for $1200. At $600/month you could probably get a nice, unfurnished two bedroom in an building built 15 years ago--hardly a million dollar apartment and it would be 99% locals. The complex I lived in had 6 buildings with the #2 building 60% occupied and #3-#6 occupied at less than 25%. A large number of office buildings, shopping malls and apartment complexes went up in advance of the Beijing Olympics and a large percentage sat empty. With that said, some of the large shopping complexes filled up quick despite their large footprint. It appears a lot of residential real estate was often bought for speculation and not as a rental investment. 

Fri, 03/25/2011 - 10:39 | Link to Comment DosZap
DosZap's picture

Likely a 7.62x25 to the back of the head.

Fri, 03/25/2011 - 11:04 | Link to Comment Dburn
Dburn's picture

They ask for 50% down upfront and the balance within three years. See?

No credit bubble.


The problem is money, despite the Chinese people's ability to save an astonishing percentage of their income, as it will never be enough to meet those terms. Middle Class pay is generally in the $900-$1500 a month area the last I read.


Consider what home sales would be like here with 50% down and three-year payment terms with a shrinking wage base. China's wage base is going up for around 130 million people in the middle class. Here it would qualify them for assistance. There they are considered relatively well to do except when it comes to buying a home.


One may have been able to do it in the past with property values rising as long as they downsized. But, not anymore. Hey, it's even a problem for the 1-2 Million dollar home bracket here. Only till you get up above 25 million+/- 5 million, do you see all cash transactions here.


Just another data point that reinforces the argument that we are heading towards a cliff at the speed of gravity and there is nothing we can do to stop it ...anywhere.

Sat, 03/26/2011 - 09:21 | Link to Comment FEDbuster
FEDbuster's picture

The "Barney Frank" of China will emerge and demand that the avg. Chinese worker be given a 100 year mortgage with zero down, backed by a govt. agency guarantee.  This will solve the housing bubble problem.  The "iron rice bowl" for the new century.

Fri, 03/25/2011 - 07:49 | Link to Comment Wakanda
Wakanda's picture

"...completely hollow, both literally and metaphorically."

Only careful central planning can pull of shit like that.  Amazing, I'm in awe.

Fri, 03/25/2011 - 08:05 | Link to Comment Sam Clemons
Sam Clemons's picture

Only careful central planning fueled by fiat can pull shit like that.*

Fiat has enabled so much waste of resources on unproductive works that it is sickening.

Sat, 03/26/2011 - 09:22 | Link to Comment FEDbuster
FEDbuster's picture

Malinvestment, bitchez!

Fri, 03/25/2011 - 08:50 | Link to Comment Dismal Scientist
Dismal Scientist's picture

Central planning has no doubt been building some of these too...

http://ftalphaville.ft.com/blog/2011/03/25/526531/bargain-basement/

 

Fri, 03/25/2011 - 09:00 | Link to Comment Rhodin
Rhodin's picture

"Only careful central planning can pull of shit like that.  Amazing, I'm in awe."

Not much of a central planning fan.  Nevertheless, after a few more great earthquakes, those guys might be looking like genuises.

Fri, 03/25/2011 - 09:28 | Link to Comment ebworthen
ebworthen's picture

Bet AIG is insuring it all.

Fri, 03/25/2011 - 09:46 | Link to Comment Sheriff Douchen...
Sheriff Douchenik from AZ's picture

You mean the US Govt is insuring it all? Probably... if it helps Buffett out.

Mon, 03/28/2011 - 03:42 | Link to Comment ebworthen
ebworthen's picture

Exactly.

Fri, 03/25/2011 - 07:49 | Link to Comment GoldmanBaggins
GoldmanBaggins's picture

13 million new appartment shoppers from Tokyo

Fri, 03/25/2011 - 07:55 | Link to Comment Big Corked Boots
Big Corked Boots's picture

They will be looking in America, where they would be welcomed, long before they go to China, where they are hated.

On second though, lots of other countries would take them before they ever got to the US.

Fri, 03/25/2011 - 08:01 | Link to Comment johnQpublic
johnQpublic's picture

which is worase...

being hated or irradiated?

Fri, 03/25/2011 - 08:57 | Link to Comment High Plains Drifter
High Plains Drifter's picture

The Chinese have a long memory imbedded in them, that goes way back, even before the japanese invasion of ww2, no?

Fri, 03/25/2011 - 09:13 | Link to Comment sumo
sumo's picture

Waaay back:

http://en.wikipedia.org/wiki/Shaolin_Kung_Fu

...In the 1540s and 1550s, Japanese pirates known as wokou raided China's eastern and southeastern coasts on an unprecedented scale...

 

Fri, 03/25/2011 - 09:50 | Link to Comment reader2010
reader2010's picture

You shit me? In China, anyone born after 1984 doesn't even know their beloved rulers rolled the college students with tanks in Tienanmen Square in 1989. 

Fri, 03/25/2011 - 09:54 | Link to Comment High Plains Drifter
High Plains Drifter's picture

do they put flouride in the drinking water over there?

Fri, 03/25/2011 - 10:32 | Link to Comment reader2010
reader2010's picture

I heard they eat plastic rice with plastic milk.

Fri, 03/25/2011 - 10:44 | Link to Comment DosZap
DosZap's picture

Haven't you heard thats the new cure for Plastic Surgery.

NEVER a wrinkle.

Fri, 03/25/2011 - 15:06 | Link to Comment greenbear
greenbear's picture

That the US would be so fortunate!  The western press hasn't covered the immense aid China has been providing to Japan compared to America during this catastrophe.  (No links, just something I read or heard somewhere.) This may be a turning point - Japan moving from their position as a colony of the declining western powers to the Chinese sphere of influence.  I'm not so sure Japanese immigrants wouldn't be welcomed by the Chinese government, especially their women?

Fri, 03/25/2011 - 08:01 | Link to Comment Oh regional Indian
Oh regional Indian's picture

I was just thinking the same thing Goldman. Transfer of weath, savings and high-end work-force from Japan to China. And a tremendous counter-force to use against their own "workers".

Th edot-connecting exercises, possibilities in this current scenario can leave you feelign a little bit KRAAAZY!

ORI

http://aadivaahan.wordpress.com/2011/03/24/lets-start-from-the-very-beginning-a-very-good/

Fri, 03/25/2011 - 10:43 | Link to Comment DosZap
DosZap's picture

Not only is this fact, they just announced they are going to build 200 million new homes.(for who, American Expats?)

Hey, we can ship them a few.

Fri, 03/25/2011 - 07:50 | Link to Comment Abitdodgie
Abitdodgie's picture

This could be the new Japanese district of China

Fri, 03/25/2011 - 08:56 | Link to Comment Wakanda
Wakanda's picture

+2

Fri, 03/25/2011 - 09:16 | Link to Comment Judge Judy Scheinlok
Judge Judy Scheinlok's picture

Do you know why the original settlers of Japan left China?

To establish their own culture, economy, and government?

I wouldn't put money on that type of reverse migration. They'd more likely got to Australia or the US as they own much of our IP via patents anyway.

Fri, 03/25/2011 - 07:53 | Link to Comment Popo
Popo's picture

Damn you Steve Jobs. I want to watch this but my iPad won't play Flash. Anyone posted this to YouTube yet?

Fri, 03/25/2011 - 07:52 | Link to Comment doomandbloom
doomandbloom's picture

China seems to be in as much as a need for war as America.....

I wont be surprised to find out that they too are waiting for a good reason to enter one...( does not matter which side)

Fri, 03/25/2011 - 07:58 | Link to Comment falak pema
falak pema's picture

War on debt creators!...buy deep fried WS bankstas cheap...schezwan style...very spicy cooked US imported  meat...re-exported to USA at give-away prices. With a lithium battery as bonus!

Fri, 03/25/2011 - 07:54 | Link to Comment Dooud
Dooud's picture

I could use a free pad, man.... And a nice rug!

Fri, 03/25/2011 - 07:53 | Link to Comment Jason T
Jason T's picture

Don't we have some 19 million vacent homes in America?  And we're 25% of their population.  If we has 1.3 billion people, then we'd have 76 million vacent homes.

Fri, 03/25/2011 - 08:55 | Link to Comment umop episdn
umop episdn's picture

Too true. However, the US is in dire straits financially. The Chinese may have other vacant housing units, or this could be propaganda (ours or theirs, or both). Gubbermints lie.

Fri, 03/25/2011 - 08:59 | Link to Comment High Plains Drifter
High Plains Drifter's picture

that is correct.  we have a dying middle class here and i have to ask, what are the chinese thinking?

Fri, 03/25/2011 - 10:49 | Link to Comment DosZap
DosZap's picture

No, our middle class is fixing to come back, we now are at 50 million hispanics, and they are the highest numbers in Texas schools.(likely 30% illegal), but we by law must let them into public schools at 9k per student.

Sweet deal eh?.

Fri, 03/25/2011 - 13:58 | Link to Comment Judge Holden
Judge Holden's picture

This is a typical American attitude:  Blame the hispanics (gays, muslims, commies, welfare queens, etc...) instead of the people in power that have actually caused this disaster. 

 

Over half our federal discretionary spending goes to funding the military industrial complex, but don't let that stop you from slamming those thieving Mexicans who are destroying our country.

Fri, 03/25/2011 - 14:13 | Link to Comment squexx
squexx's picture

True! The REAL problem is the jooz behind it all!

Fri, 03/25/2011 - 17:45 | Link to Comment Bananamerican
Bananamerican's picture

millions of mexicans peasants pouring in unbidden yet undeterred are a symptom of our national illness...like bacteria in a wound....

yea TPTB bit us, but we don't celebrate the creeping sepsis either...

 

Fri, 03/25/2011 - 19:58 | Link to Comment Judge Holden
Judge Holden's picture

The two groups (powerless Mexican immigrants vs TPTB) are not even close in terms of the damage that they have done to our country.  If your town has just been nuked, you don't go complaining in the same breath about the juveniles that smashed your mailbox, do you?

Fri, 03/25/2011 - 13:58 | Link to Comment Judge Holden
Judge Holden's picture

double post

Fri, 03/25/2011 - 07:55 | Link to Comment falak pema
falak pema's picture

Banzai! Japan takes over chinatown in china makes it radiated shusi town...hope this inflow f competent japanese will make chinese chops sticks less sticky and dirty locally... 

Fri, 03/25/2011 - 07:54 | Link to Comment pragmatic hobo
pragmatic hobo's picture

another problem I see is that if the Chines goods we get here in the states are any indication these buildings are probably slapped together using cheapest materials available so they will likely age quite badly.

Fri, 03/25/2011 - 08:07 | Link to Comment whoopsing
whoopsing's picture

It's kinda the pot calling the kettle black hobo,the new shit that went up here (nyc) is absolute garbage IMHO,but yes you are right those building's are decaying daily weather people live in them or not

Fri, 03/25/2011 - 08:57 | Link to Comment umop episdn
umop episdn's picture

Yeppers. BARF construction (we throw it up) works in both countries, as well as worldwide. They work cheap, and Charles the foreman makes things look good (until the first rain). For cheap housing, call up 'Chuck!'

Fri, 03/25/2011 - 07:54 | Link to Comment Bartanist
Bartanist's picture

I am sitting in the Pudong International Airport (Shanghai) as I type this. On the drive from Suzhou to Shanghai today (passing by the Yulong Rubber Company) we must have seen a couple of hundred high rise apartment building half finished with massive cranes hanging over them.

The governments have started to put some controls on real estate speculation by limiting the number of apartments that one can buy and also by requiring larger amounts of money down on successively more apartments purchased.

But as one company president mentioned to me. There are very many Chinese with a lot of money and nothing to spend it on or invest it in. 

Fri, 03/25/2011 - 07:58 | Link to Comment rich_wicks
rich_wicks's picture

But as one company president mentioned to me. There are very many Chinese with a lot of money and nothing to spend it on or invest it in.

Buy 1000 ounces of gold.

Fri, 03/25/2011 - 08:06 | Link to Comment falak pema
falak pema's picture

With oil prices spiking why don't they reinvest in bikes...90 millions bikes later...china becomes cleaner...as all their electricity is generated by their kites...like in kitegen project from Italy.Future of humanity...what'll be left of it...en.wikipedia.org/wiki/Kitegen

www.kitegen.com/en

Fri, 03/25/2011 - 09:02 | Link to Comment High Plains Drifter
High Plains Drifter's picture

does the google search engine work over there?  would you mind typing in

jasmine revolution and see what comes up?  just kidding..........

Fri, 03/25/2011 - 07:55 | Link to Comment duo
duo's picture

Irony -  Aussies talking about a real estate bubble

Fri, 03/25/2011 - 09:16 | Link to Comment nedwardkelly
nedwardkelly's picture

But it's different this time!

Fri, 03/25/2011 - 07:55 | Link to Comment rich_wicks
rich_wicks's picture

Imagine if China invested that much money to save the panda?  They'd be a million of them.  This is an amazing and tragic misallocation of capital.

Fri, 03/25/2011 - 08:04 | Link to Comment johnQpublic
johnQpublic's picture

spending that much on the damn panda would be an even more tragic missallocation of capital

Fri, 03/25/2011 - 09:32 | Link to Comment ebworthen
ebworthen's picture

They'd make robot panda's and build an amusement park around it.

Fri, 03/25/2011 - 11:18 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

...and everyone could pay to watch the robot panda trade BIDU shares...brilliant!!!!

Robot panda doll sales

+liquidity rebates

+admission

+tapioca bubble tea concessions

=PROFIT

Fri, 03/25/2011 - 08:13 | Link to Comment Abitdodgie
Abitdodgie's picture

America just spends all it's money on killing people and blowing things up

Fri, 03/25/2011 - 09:13 | Link to Comment Fascist Dictator
Fascist Dictator's picture

damn....you'd think we'd be doing a better job of it.....

Fri, 03/25/2011 - 08:00 | Link to Comment fijisailor
fijisailor's picture

This seems to be the goal of aspiring US central planners

Fri, 03/25/2011 - 08:00 | Link to Comment bullionbaron
bullionbaron's picture

The property speculation and bubble is almost as bad in Australia. We have 3500 units sitting available on the Gold Coast alone. Prices here have already started to drop and we need a hand warning our First Home Buyers. If you would like to help by joining the property buyers strike which is gaining momentum on a local campaign site, please take 10 seconds to vote here: http://suggest.getup.org.au/forums/60819-campaign-ideas/suggestions/1595...

 

Fri, 03/25/2011 - 09:21 | Link to Comment sherryw
sherryw's picture

Mate! Waste of time. 60 percent of contracts are already falling over due to finance, The banks are helping this 'strike' along.

Fri, 03/25/2011 - 08:00 | Link to Comment Natasha
Natasha's picture

All that farmland plowed under to build useless structures as food inflation hits double digits. Economic brilliance knows no bounds.

I fully expect the Chinese to tear down these empty cities and re-build newer, nicer, shinier, empty cities in their place.

Fri, 03/25/2011 - 08:17 | Link to Comment falak pema
falak pema's picture

Aussi's should openly invite japanese san into its empty houses too. They will have no agricultural land to feed Tokyo/Kyoto populations. Japan urgently needs agri land to feed its destitute population.

Fri, 03/25/2011 - 08:28 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Hah! The myth of Sisyphus comes to mind.
ORI

Fri, 03/25/2011 - 08:03 | Link to Comment stoneman sacked
stoneman sacked's picture

Keynesian Heaven!! Krugman will be having multiple erections

Fri, 03/25/2011 - 08:04 | Link to Comment papaswamp
papaswamp's picture

Equake biotchez!

NewEarthquake 6.4 earthquake, near the east coast of Honshu, Japan. Mar 25 8:36pm at epicenter (18m ago, 108km ENE of Sendai, depth 39… http://j.mp/faUf4X

Fri, 03/25/2011 - 08:06 | Link to Comment Mr Sceptical
Mr Sceptical's picture

I am not sure Jim O'Niel and his fellow bandits at GS would agree. China is a miracle ;-)

Fri, 03/25/2011 - 08:09 | Link to Comment entendance
entendance's picture

China's ghost cities: we alread posted it yesterday with pictures at Anse Intendance... http://www.entendance.com/forums/viewtopic.php?f=5&t=793&start=50#p16186

Fri, 03/25/2011 - 08:12 | Link to Comment YHC-FTSE
YHC-FTSE's picture

This is the same satellite image I saw a few months ago. Gotta hand it to the Aussies - they really believe in the adage that repetition is the mother of all learning. Me? I only need to be told something once, thanks.

Fri, 03/25/2011 - 09:15 | Link to Comment sherryw
sherryw's picture

good for you!

Fri, 03/25/2011 - 08:19 | Link to Comment topcallingtroll
topcallingtroll's picture

The usa is looking better and better compared to the rest of the world. We may come out on top again and all those who wish to see america collapse and suffer may be disappointed.

Fri, 03/25/2011 - 08:21 | Link to Comment falak pema
falak pema's picture

you are true son of Benocide...keep printing...

Fri, 03/25/2011 - 08:29 | Link to Comment TaxSlave
TaxSlave's picture

We can outprint the Chinese if we put our hearts and souls into it.

Fri, 03/25/2011 - 08:55 | Link to Comment Wakanda
Wakanda's picture

Yes we can!

Fri, 03/25/2011 - 11:15 | Link to Comment Brother Revegen...
Brother Revegend Magoun's picture

change )

Fri, 03/25/2011 - 08:28 | Link to Comment MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

The usa is looking better and better compared to the rest of the world.

You should have seen the other guy!

Fri, 03/25/2011 - 08:20 | Link to Comment falak pema
falak pema's picture

Great opportunity for Keynesian Ponzi scheme : relocate Japan in Aussi and China lands and feed them so that they recreate Japan inc. Locally. Re-Marshall Plan here we come.

Fri, 03/25/2011 - 08:20 | Link to Comment bob_dabolina
bob_dabolina's picture

Looks  like Tokyo in a few months.

Fri, 03/25/2011 - 08:23 | Link to Comment scratch_and_sniff
scratch_and_sniff's picture

Man, this has blown me away, this has really blown me away. That whole gig is just going to explode and take the rest of the world with it...lets hope it pops before it gets any bigger because these people have well and truly lost they're marbles. (someone make it stop, MAKE IT STOP I WANT F***ING OFF!!!, ARRRGHGGG WHERES THE LITHIUM, NURSE, NURSE!!...)

Fri, 03/25/2011 - 08:29 | Link to Comment TaxSlave
TaxSlave's picture

We're fresh out of lithium.  Take your pick, strontium or cesium, dispensed with a paira heavy duty, zircon encrusted tweezers.

Fri, 03/25/2011 - 09:25 | Link to Comment Judge Judy Scheinlok
Judge Judy Scheinlok's picture

Rumor has it that those clever Japanese, after spraying the reactor core with saltwater discovered iodized salt. Patent pending Hitachi Corp.

Fri, 03/25/2011 - 08:24 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Misallocation of capital is nothing new for China. How much capital was spent on 'The Great Wall'? Yet the Great Wall remains, most of it, as a testament to the folly of defensive fortifications against invading armies.

In a command economy like China's a simple new gov decree that 'all housing will be priced affordably' would, in one move, confiscate the wealth of those that are speculating in property and offer affordable housing to the masses. I suspect that this will come to pass in due time.

If one has a command economy, why not use it to prevent government overthrow by the masses?

Fri, 03/25/2011 - 08:28 | Link to Comment YHC-FTSE
YHC-FTSE's picture

+1 Astute. I suspected the same, but with some reservations. When politicians become landowners and real estate speculators, the needs of the many become less important. 

Fri, 03/25/2011 - 08:40 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

The pols at the top of the heap have encouraged the development of the 'empty cities and malls' for a reason.

Much of the development has been carried out by local pols that are known to be crooks and are dispised by local peasants. A great deal of peasant farm land has been seized by local pols for 'development', and caused animosity.

When the 'affordable housing decree' comes, all the peasants will be on the side of the pols that make the decree and the local pols will have little if any support from their constituents. Voila, the pols at the top are heros.

Chinese pols, unlike their American counterparts, know that the Chinese peasants will revolt when the peasants sense that the system has become too unfair.

Chinese pols at the top of the heap want to remain there. To fall from grace can mean a bullet in the back of the head...and, they are far from stupid. So, they have but one choice. They will continue to let speculators pour into the RE maket and at some point they will confiscate the real estate and redistribute it.

The 'empty cities' can be filled quickly once the decision is made to make housing affordable.

Fri, 03/25/2011 - 08:47 | Link to Comment YHC-FTSE
YHC-FTSE's picture

Can't fault your chain of logic from similar anecdotes I've been hearing. Reminds me of a saying they have in China, "The Mandate of Heaven", and how the top pols have this in mind when they plan their survival strategies. Interesting, thanks.

Fri, 03/25/2011 - 09:41 | Link to Comment herewego...
herewego...'s picture

This kinda stuff is the reason I come here, thanks.

Fri, 03/25/2011 - 09:46 | Link to Comment Verstehen
Verstehen's picture

A city for millions can not be "filled" because their are not enough jobs. The evolution of cities must start from a slum not the other way around. Big Malls with plastic stuff will bring the Chinese down. We all know the Chinese are thieves. But stealing the American model (suicide economics) was one loot too much.

Fri, 03/25/2011 - 08:38 | Link to Comment ShankyS
ShankyS's picture

64 million empty appartments - do you think they knew tokyo was gong to be evacuated and all those prople would beed homes?

Fri, 03/25/2011 - 08:44 | Link to Comment dick cheneys ghost
dick cheneys ghost's picture

Evidence that the bubble is leaking.....China now buying Corn from US after many years and suffering its worse drought in 60 yrs.....wont be long until things get out of control... 

 

http://nakedempire2.blogspot.com/2011/03/is-chinas-real-estate-bubble-about-to.html

Fri, 03/25/2011 - 08:47 | Link to Comment reader2010
reader2010's picture

Why not? The NWO is based on Monsanto's GM seeds.

Fri, 03/25/2011 - 08:44 | Link to Comment freedmon
freedmon's picture

Unless the government plans a massive forced relocation of peasants away from their farms. They will have no trouble finding 64 million people if they just demolish some homes.

Fri, 03/25/2011 - 08:47 | Link to Comment reader2010
reader2010's picture

I heard they just simply demolish those and replace them with new ones that're even more expensive and fancier. Wash, rinse and repeat.

Fri, 03/25/2011 - 08:58 | Link to Comment Fascist Dictator
Fascist Dictator's picture

Sometimes I wonder if China knows that something BIG is coming down the pike and they'll need to move large segments of population. Or maybe they're just keeping idle hands busy.....

Fri, 03/25/2011 - 09:30 | Link to Comment kridkrid
kridkrid's picture

Sure... and I think sometimes our shadow gov't knows that something big is coming down the pike as well, no?  My opinion... WWIII is coming... everything happening right now is some sort of courting ritual.  Who is going to side with whom.  We've positioned ourselves (or tried to) right in the middle of oil country for a reason.  FEMA camps set up for???  Refugees?  Political dissidents?  Lots of jockeying for what will be at the core of the next currency.  Everyone wants to be a player... but the problem that faces much of the rest of the world... the US military.  Someone in some thread said something about the US debt and China drilling in Anwar... "you guys owe us trillions... we are taking your oil"... sure. 

Sat, 03/26/2011 - 16:01 | Link to Comment Kobe Beef
Kobe Beef's picture

I could be wrong, but I think World War Three has already started. Bush named it the Global War on Terrrr. I guess "Anschluss" was already taken.

Of course it is not about terror, but hegemony & resources. World War II started in much the same way.

Recall that Germany's annexation of Austria, Italy's invasion of Ethiopia, and Japan's invasions of Korea & China were precursors to the later full-scale engagements between the Allied & Axis Powers that are commonly thought of as "WWII". I believe these early events are analogous to where we are now in respect to the eventual course of conflagration into WWIII.

$0.02,

Beef

PS: kridkrid, I too consider the pre-installation of concentration camps on US soil to be both ominous & deeply disturbing.

Fri, 03/25/2011 - 09:00 | Link to Comment unclebigs
unclebigs's picture

How much silver is in those apartments?  Does this mean I should buy more silver?

Fri, 03/25/2011 - 09:06 | Link to Comment billwilson
billwilson's picture

Inflate it away.

With 20% inflation in a couple of years the houses will be affordable (because they will not have gone up in price). The solution to all ills (as seen by world central banks with their backs to the wall - inflation.

 

Fri, 03/25/2011 - 09:15 | Link to Comment Verstehen
Verstehen's picture

Its unclear when this bubble comes down. The Chinese will build until they reach Europe. What goes up must come down. China is Australia´s biggest trade partner. Watch the Aussies going in full panic mode when it happens.

It could be the endgame for China because the next 5-year plan is becoming a consumer society. Millions of Chines would lose everything. Should the west somehow stop buying Chinese garbage this could explode in their face if the bubble comes down.

Chinese plans to expand into Africa and South America must be defeated. This would be a strategic blow that could last decades. Who cares about Chinese stability?

Fri, 03/25/2011 - 09:19 | Link to Comment reader2010
reader2010's picture

This entire Chinese shit is based on cheap/affordable oil. They're braindead on Peak Oil. When the oil-to-gold ratio reaches 5:1 or even 8:1, the shit has to hit the fan. Expect WWIII to follow that.

Fri, 03/25/2011 - 11:09 | Link to Comment MSimon
MSimon's picture

Oil at $200 an oz? That stuff must be harder to find than I thought.

Fri, 03/25/2011 - 09:17 | Link to Comment Savonarola
Savonarola's picture

I was in Shanghai in the mid 90's. There were dozens of large, but empty, office towers... empty, brand, spankin, new.

My Chinese colleague said they were built to house all the foreign banks and companies which were gonna come to China... which they did.

 

 

Fri, 03/25/2011 - 09:33 | Link to Comment AccreditedEYE
AccreditedEYE's picture

We are surprised that in keeping with the Japanese earthquake economic miracle, China has not destroyed the vacant city yet only to rebuild it immediately.

Larry Summers endorses this statement.

Fri, 03/25/2011 - 09:36 | Link to Comment gwar5
gwar5's picture

What if someone just wants a 3 bdr/ 2 bth ranch with a yard?

Fri, 03/25/2011 - 09:56 | Link to Comment Sheriff Douchen...
Sheriff Douchenik from AZ's picture

Good question...if it's everyones right to an investment property why not a right to a yard also?

 

Fri, 03/25/2011 - 11:00 | Link to Comment Rogerwilco
Fri, 03/25/2011 - 10:02 | Link to Comment ThorsteinVeblen
ThorsteinVeblen's picture

640 000 000 000 * 10 = 6.4 × 10 to the 12th.

This is similar to what the U.S. would spend on defense over a ten year period. What would produce a better long term result? 64,000,000 vacant homes at $100,000 each or, offensive wars and the lies required to fight them? 

A poor comparison maybe, but when capitalism fails, sometimes the only remaining evidence is the last-ditch political influence that tries to save it from itself.


Fri, 03/25/2011 - 11:05 | Link to Comment Rogerwilco
Rogerwilco's picture

The U.S. has several million vacant homes, held hostage by banks.

Fri, 03/25/2011 - 11:15 | Link to Comment MSimon
MSimon's picture

You count military spending against disasters prevented. Since there is no way prevenred disasters can be quantified, military spending will get reduced until there is a disaster.

 

See world history 1920 to 1945.

Fri, 03/25/2011 - 10:03 | Link to Comment deez nutz
deez nutz's picture

aren't these the housing areas for the migrant American worker?

Fri, 03/25/2011 - 10:20 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Are they nice?You will see a lot of Japanese moving to the mainland.  Yen for yen.

Fri, 03/25/2011 - 10:54 | Link to Comment Cortez
Cortez's picture

New Toyko?

Fri, 03/25/2011 - 10:55 | Link to Comment luk427
luk427's picture

Don't worry USA, your goverment is thinking about you to. Except they call them FEMA CAMPS.  http://www.bibliotecapleyades.net/sociopolitica/esp_sociopol_FEMA02.htm

Fri, 03/25/2011 - 11:03 | Link to Comment PulauHantu29
PulauHantu29's picture

Talk about Bubbles...I read Bill Bonner's articles about Australia. Either he or his staff penned an excellent article on the House Bubble in Australia where the median house price in USD is over.....take a guess.....come on.....take a guess....

 

...please take a guess.....

 

 

US$560,000  !!!!!!!!!

 

BOOYAAH!!!!!!!!!!

Fri, 03/25/2011 - 11:07 | Link to Comment David Merrill
David Merrill's picture

I too call them FEMA Camps. I figure within a couple years Americans will grab free air to a $30K/year job in China building doorknobs, hinges or shoelaces...

http://savingtosuitorsclub.net/content.php?142-A-China-Ca-Now!

 

Fri, 03/25/2011 - 11:12 | Link to Comment Brother Revegen...
Brother Revegend Magoun's picture

I don't see any problems with those millions of apartments in China. It is just a question of time when people will be able to afford living in them. Either they will earn more, or prices will go down. 

Fri, 03/25/2011 - 11:46 | Link to Comment Double down
Double down's picture

My friend depreciation is not just a good idea, it is reality.  When that happens one slum, the old one, will have been replaced by the new slum.  There is the polarisation.

My understanding is also that many actually are owned as investments.  I would hate to be on that end.  There will come a time when owning property in China will be a curse.   

Fri, 03/25/2011 - 11:57 | Link to Comment Brother Revegen...
Brother Revegend Magoun's picture

I cannot agree with you

Fri, 03/25/2011 - 11:35 | Link to Comment zerozulu
zerozulu's picture

Excellent documentary. It is shocking and surprising to all of us because we look through the capitalistic eye-glasses. I have been in china before the revolution and I think I know what will happen. First thing these apartments are not built like in the USA by some tool brothers for profit with loan. Chinese government provided the money and is not worried to pay it back to any one. Sooner a government run factory or firm will be in the neighborhood and all these apartments will be given to the employees for a buck a month. We cannot believe this because we don’t know how to see like a communist. China is a communist country sugar coating with capitalism. But it will stay communists.

Fri, 03/25/2011 - 11:40 | Link to Comment Convolved Man
Convolved Man's picture

Maybe there isn't enough water and electrical power for the potential 64 million residents.

That's coming in Phase II?

Fri, 03/25/2011 - 12:43 | Link to Comment Infinite QE
Infinite QE's picture

Sounds like the next Japantown as Japan will need to be evacuated.

Fri, 03/25/2011 - 13:01 | Link to Comment SmittyinLA
SmittyinLA's picture

With a population of 1.2 billion people that's a 5% vacancy rate which is pretty small considering the number of new units being constructed.

China has hundreds of thousands of factories with dorm housing at densities almost higher than illegals packed into LA apartments.

Fri, 03/25/2011 - 14:24 | Link to Comment Judge Holden
Judge Holden's picture

China has hundreds of thousands of factories with dorm housing at densities almost higher than illegals packed into LA apartments.

 

Move along, nothing to see here, no disaster in the making, no banking crises, etc... right?  I agree there are millions of Chinese that need their own housing, which just shows how extreme the problem is wrt housing prices.

Fri, 03/25/2011 - 21:18 | Link to Comment edotabin
edotabin's picture

.......

 

 

Fri, 03/25/2011 - 14:30 | Link to Comment Rogerwilco
Rogerwilco's picture

Did you watch the report? Even if they could make the 50% down payment, the DTI on a mortgage for average workers would be over 75%.

Fri, 03/25/2011 - 21:20 | Link to Comment edotabin
edotabin's picture

This isn't about a banking crisis.  This is about someone deciding to call attention to a banking crisis. Everything was fine in Greece 1-2 years ago.  Like they didn't know they were headed off a clif. Sure they knew. They just recently made it HEADLINES because it suits certain purposes. Like handing over sovereignty.

So apply zero mathematics and banking principles to the empty houses in China. They will fulfill their role when someone decides it is time. Whether they will be considered part of the bubble or the savior of mankind is up to those making the decisions; not mathematics, banking principles or any remote form of truth.

Fri, 03/25/2011 - 21:06 | Link to Comment edotabin
edotabin's picture

...

Sat, 04/02/2011 - 23:22 | Link to Comment mariocavolo
mariocavolo's picture

Hello Everyone, I live and do business in Shanghai. I have lived in China for 11 years. I know the business, the culture, the markets. Those of us who live here and see firsthand what is going on find ourselves frequently find ourselves clarifying reality for those of you who are on the outside looking in. The Dateline video is way off base for countless reasons. In addition, the negative assumptions being made in such articles and comments that follow is a further indication of how very far offbase. I'm being gentle with my words...nonsense is closer to being the right word. The Ghost Town phenomenon is a tiny part of the overall market. Here's a brief rundown of my counterpoints: 

China is cash rich. Filthy cash rich, in both the public and private sector, to the degree that Americans can't fathom its reality. People earning $300/month with USD $40,000 in the bank. How do they do that? Because China has a cash economy of 2 to 4 TRILLION that is not included in the GDP numbers, including amongst many of the lower income people who look lower income but have $50-100,000 in the BANK.  

Because the mortgage level is far lower.

Let me ask a question. Do you think people with no mortgage or a 50% mortgage and hidden cash in the range of $50 to $250,000 will care or freak out or have their lives ruined in some way if property prices go back down 20-30%? Of course not, they'll be disappointed and sip their tea. 

Empty apartments are NORMAL in Chinese culture. They are an asset store, no different than a bar of gold. This is possible because annual carrying costs are a pittance.

The number is NOT 64 million. "It is said that..." Come on people, learn when you have been primed by that kind of rhetorical PR line used to set the tone without the source or facts. Who is "It is said..." by whom, when, where, show me...

Real Estate Bubble in China? Where? Toppy? Yes. High? Yes.  But very high ONLY in selected markets - Top prices here are no higher than European, U.S., Australian, Canada markets. 

A full response requires far more space than is normally used for this comment section. 

Cheers all, Mario Cavolo

 

 


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