This page has been archived and commenting is disabled.
Beijing Alone Has 50% More Vacant Housing Than The US
Putting some housing things into perspective. From the (less than credible) NAR:
Total housing inventory at the end of April rose 9.5 percent to 2.54 million existing homes available for sale, a seasonal increase which represents a 6.6-month supply at the current sales pace, up from a 6.2-month supply in March. Listed inventory is 20.6 percent below a year ago when there was a 9.1-month supply; the record for unsold inventory was 4.04 million in July 2007.
Meanwhile, half a world away, from a just released report in Beijing News (google translated):
The Beijing Public Security Bureau Population Administration Department said yesterday that have checked the information of the mobile population 725.5 million, mark the rental housing 1.39 million, checking vacant houses to 3.812 million.
So, broadly speaking: US: 2.5 million available homes; Beijing - one city in China - has 3.8 million??
That is all.
- 24306 reads
- Printer-friendly version
- Send to friend
- advertisements -


All they have to deal is repeal the One Child Per Family policy, and problem solved!
Not surprising as their population is 4X the US.
China is the disaster on pg16 that nobody talks about.
Q: How does one say buyer's market in pinyin?
A: Wi Long Shan Ti.
Whoah whoah whoah, there is a big difference between NAR homes for sale and vacant housing. Most of those NAR homes for sale have people living in them.
A better comparison (although potentially no more statistically trustworthy) would be the Census Vacancy statistics which are compiled quarterly. http://www.census.gov/hhes/www/housing/hvs/qtr112/files/q112press.pdf
See Table 3. As of 1Q 2012, there were 18.4 million vacant housing units in the US, 4.4 million of them are seasonally vacant, the other 14 million are for rent (3.8 million), for sale (1.6 million, this would be the fraction of the NAR number that is actually vacant), and 7.6 million held off the market by the owners.
The Beijing number is still notable, however. The equivalent would be the entire Northeast region of the United States, which accounts for about 20% of those vacancy stats (3.6 million total).
A Bubber of Ronery Houses
Central planning wins again.
Redpill, good job. Like they say, never let the facts get in the way of a good story.
Jim O'Neill told me that for China, with their streamlined central planning authority has nothing to worry about. The real problem says Jim is the remaining democratic regimes around the world.
Very true. In China's mad dash to crank up the internal consumption end of their economy, they are creating some massive bubbles of their own.
Nothing about a housing bubble that cannot be fixed by a bulldozer bubble.
And notice, they employ the same people either way.
Step 1. Build House
Step 2. Destroy House
Repeat until you run out of gasoline and fresh water, then shit your pants.
our bubble is their bubble, our depression will be their depression.
Just like the heads in DC. "Knock, Knock, ..... nobodies home."
Ya, but at least we have people not paying mortgages occupying houses that should be vacant.
About to be 3X's. They really like to fight amongst themselves in China. History shows a great propensity to fracture and this time...aint no wall high enough.
I do have to note it will be interesting to watch China fight China with shit made in China. That's really going to have some really disappointing moments.
The real key is housing affordability. Despite the image that China promotes, there is a huge population that is at or near the poverty level. One can easily forget this in the showcase cities like Bejing and Shanghai.
Much of this excess housing was built solely for investment purposes and will remain vacant for years.
And that is why they are eyeing Australia, Canada and the US eventually. They need a place to put their excess population.
That's nothing. In Spain alone we have more than 3 million empty dwellings...
FYI, Spain's population is less than 48 Million people.
Bejing is an awesome city- not what you would think for a Communist/Facist country - Also they have incredible hookers.
Let's be fair...the nice thing about hookers in Bejing is you dont have to tip them.
Tipping is considered propositioning...
At least the hookers are not the government....like in other places...
Some things can be fast tracked, but even if everyone got crankin' & they induced labor early, I imagine it would be at least a few years before they'd have burgeoning new families with capital and good jobs looking for housing.
http://fairbaseballist.files.wordpress.com/2011/03/babylawyer2.jpg
if only those homes were in canada!
They would be igloos...
http://www.vancouversun.com/business/mortgages/Vancouver+home+prices+fal...
having lived in Beijing for a long time, I can tell you that those numbers surely include small rooms for rent, and places you wouldn't even put your mother in law.
try me
My mother outlaw is too fat and wouldn't fit.
and that most of the property where paid cash upfront....
No only that, but there is a massive migrant population with numbers that don't quite add up unless you are counting them living in very cramped quarters. Hard to get any real numbers as no one will ever admit to it as tax is owed on rental income. Also, vacant untouched is simply worth more than furnished, as there are renovation cost considerations involved.
It is very very very common to snap up properties in cash up front to secure future holdings for parents and for children. People living in cramped quarters are saving up to buy their own places. It's not really all that crazy if you fully understand the way things work here.
Can you elaborate on how things work there? Just curious, because from over here it looks like a big CF.
OT: What is with the chinese children running around without diapers crapping all over the place, like the floors of retail malls and in the hotel lobby?
Most of the generation of childbearing age were not raised in a world of diapers. There's also a weird concept of infant shit and piss being clean. Why waste money on diapers? The kid'll figure it out soon enough.
Generally speaking, housing used to essentially be a guaranteed thing that was assigned and rented out for token sums. That changed when the ability to purchase was introduced as it was believed that it would make housing more efficient. No one cared at first, then they started jacking up the rents
Eventually, pretty much all of the old company housing was converted to private ownership. Do remember of course that the company was pretty much your life. The companies had their fingers in many sectors and was entirely possible to move within the system and change companies with permission. Housing, food, education, retirement, medical care, all provided by the company. As housing was assigned, basically you lived surrounded by your coworkers families.
So, back to present day, that "iron rice bowl" has more or less been smashed and it's up to you to make your own and provide for the next generation. There are no property taxes and the taxes that are being trialed are focused on landlords and the very top. If you have it paid in full, it's yours as long as it's not illegal construction (and there are always signs of it if you bother to pay attention). Housing in the right locations opens up massive benefits to your children, especially in terms of schools. Owning a house is actually a massive asset that has the potential to play a role in hukou changes in the future as well. Beijing is on the top of the list of desirable hukous and owning property here is seen as a long term investment.
1) Society says you need a house to get married. Having that ready to go for your kid is a big thing and gives them a huge advantage in getting started in life. For non-locals, having an extra property or two for parents or relatives to retire in or use as a guest apartment is also a thing to do.
2) Rent can be a new iron rice bowl if done correctly, providing stable income in retirement
3) Investment properties need to be kept barebones. Apartments here come as concrete shells with subfloor and whatnot. No one really likes "used" housing when they can get "new" instead.
4) There is a HUGE flow of migrants to the cities from the countryside, many of them intend to stay in the cities and use a combination of personal and family savings to purchase properties. Having desireable empty units is a big deal.
5) Speculators have effectively been shut out of the market for the time being and the government is actively pushing prices lower. Most speculators bought prior to the height of the bubble and there is still massive demand, but it's pent up. There's zero reason to sell any of the stock on hand with the exception of needing quick funds for business ventures. With the difficulties of acquiring multiple units now, again, it's an asset worth sitting on.
6) Housing is commonly used as a liquid asset in settlements. Having multiple units to your name is a smart thing to do.
The pricing was definitely a bubble driven by speculation, however the vast vast majority of it is either paid in full, or was purchased with a loan prior to the bubble. The bubble only really took off after the US screwed the global economy prompting a flight to the housing market for safety. With the prices now under control the next focus is on driving down the rents. Yes there are "house slaves" now who are pissy about getting loans on the way down, however the downpayments are much higher than the US requires, all mortgages are full-recourse and proof of ability to make payments is rather strict. I personally know a few people who got caught, and their reaction to it has been to start side-companies and do some moonlighting for extra cash. Not extra cash to spend, extra cash to pay off the loans faster. Despite what some reports may tell you, it's very easy to live here on the cheap, and that's what most people do.
Yes, there are empty units, no it's not really a big issue. They are vacant because the owner wants them to be vacant, not because the banks seized them and are afraid of making a further mockery of their book valuations that they require for solvancy.
Thanks for that laomei. It's always great to have a first hand perspective.
So basically "houses" are just monetary units in China?
I wonder how many China bears (Chanos etc) have never even been there, don't speak the language, and don't have a clue about some of these cultural differences. Thanks for this interesting post.
Not saying I'm a buyer...but maybe it's time to close my AUD shorts...for now, anyway
Went to Shanghai for the first time of my life 1 month ago.
I know and understand a little of the chinese culture. I can really confirm that what I saw and what I heard from local people reflects what you say.
I think the biggest advantage of chinese people is that they know that they have to count only on themselves for pension and benefit.
In developed countries like US and Europe, people start to think I am entitled to receive this and that from the government... forget it. You are part of your country. You are financing you own pension fund, your benefits and this of many others.... Of course I think it is correct to help weaker people in the system... but if everybody starts to think that he is entitled to something nobody left to pay it.
In China you may have a problem with the poorer, but everyone knows that it's up to them!
Yup, what achmachat said.
well thats not good..but what do you expect from a lying comminist country?? i grew up in the 70's and 80's listening to all the prpaganda about how well the ussr was doing or how japan was going to take over the world..how did that work out??
U mean the good ol' USA?
who is communist??? China? Are you sure?
No. They are fascists. We are all fascists now.
Here is a question....Did they just simply build their infrastructure "with dollars" before the new system comes into play and infrastructure would be more expensive to build. anyone have any thoughts on that.....
So what you are saying is that the building boom is a pre-inflation hedge to offset the implied future worthlessness of their dollar-denominated bonds. That's such a good catch. My thoughts are that the western concept of "home" is 3 bedroom, 2 bath, picket fence, etc. however I would like to know if this report would be better understood if by "home" they meant "built unit". Meaning cubes arranged in buildings, which in this day and age, can be used for anything imaginable, if partitioned, piped, and/or wired correctly. The structural differences between an apt complex, a prison, and hive of business and commerce are negligible.
Like all trades, timing is of importance... If you build shit quality structures in a quick and haphazard manner that end up crumbling or otherwise deteriorating before the "new system" comes into play, then have you really gained anything? The trick is to presume that central planning is a failure... and that central planners misallocate capital...
The other question is... why would it be more expensive to build for the world's manufacturing center post collapse of the dollar? Do they have a shortage of labor or something? I see no reason to believe that there would be any marginal increase in the cost to build these structures in the future... in fact, it seems the risk is to the downside.
China can have a labor shortage if they have an energy shortage, if the petrodollar collapses, or if China oil import payment conduits are thwarted. All mean lapses in the oil supply that powers the current massive mobilization of manpower about the country.
Well if they'd quit fucking shooting and running over so many of their citizens with tanks, maybe those god damn houses would start filling up.
I bet the Chinese have more outhouses than we do as well.
no, they just squat on the side of the road and offload. Isn't that right AnAnon?
Actually they squat in the stalls...its really nasty. You want to find the 4 star toilets. Those are westernized...
True story had dinner in the Great Hall of the People and they have squat stalls.
I never used one so I cant tell you if there was toilet paper in them or not.
No. They don't have any toilet paper. I learned this the hard way. A little advice... When you travel internationally, it's BYOTP.
just for the record, I remember traveling in Europe and encountering many different versions of "toilet" - including the squat types - so it's not just a "china" thing. . .
also remember clubbing in Antwerp, which went on till dawn & involved stopping in at least half a dozen spaces for music, dancing - toilet facilities there also varied widely - including brick walls, waist high, along the sidewalk paths - they had concrete/stone floors & drained to "sewers" - men would line up facing the sidewalks, pissing while others passed. . . summer, not so pleasant odor-wise.
some of the most beautiful places in the world pre-date amrkn porcelain thrones - best get used to a global norm yankee, one day your sewers will be full.
Shit. I didn't know JPM has branches over there.
Are you kidding I have a branch at your mom's house...or in or something like that.
Tyler- Google translate sometimes has trouble translating the Chinese numbers. Are you sure its not 381*1000 instead of 381*10,000?
Tyler is correct.The character ? is 10,0000.
Here is proof: http://www.mandarintools.com/cgi-bin/wordlook.pl?word=%E4%B8%87&searchty...
Yeah it's 10,000. So 381,200 vacant houses in Beijing. Shocking...
So what, The Chinese have 3 Trillion in reserves and the US is 16 Trillion in debt.
Another mofo who don't know what foreign reserve means.
Since they have over 4 times as many people, the US housing market is in much worse shape and nowhere near a bottom
Correct. This article only looks at Beijing. Does ANYONE have a true idea how many HOMES (not broom closets for rent) are for sale in China? All I get is a vague suggestion with this article.
How much shadow inventory does each country have?
That news is out at 5 pm.
Seriously... this may be a factor of the Chinese reporting their figures more honestly than the US does. Our shadow inventory was 9 million and not dropping last I looked...
Better to ask how many ghost cities are there in China (so far).
Evacuate the Japanese from the radiation ridden Japan Island into those vacant Chinese homes
They tried that back in the 1930's. I read about it and it didn't work out so well.
And ZH spends about 50% more time then is useful looking into China's back yard, and worse, mostly through Western mediavision lenses.
If you think massive bank runs in China- a country without deposit insurance I might add- will not have a more material affect on global trade than Greece or Spain collapsing, you're as dumb as your post. The deposits in China are as worthless as any other sovereign in the world, they just play a better character on tv.
I can walk into any bank here and buy gold and silver. How about you?
Absolutely right. I'll add that I even bought gold at a government store in Beijing, paying spot plus a very small premium relative to what I get in Britain or in the states.
So, does that make Yuan deposits any more valuable than the shadow city or UST collateral on which they are based?
That depends a lot on whether the Chinese banks have another 700 trillion USD in crumbling derivative cards coming down onto their balance sheetz.
I can type that my town mayor is a bumbling idiot and that my government is oppresive and fiscally irresposible.
Now you try it.
I can walk into my local coin shop and buy gold and silver all day long with a very small premium ($1.15 silver, $10 gold) over spot. "Junk" silver coins at spot. I and everybody else in town who aren't still sleeping run out of cash before they run out of PMs. What's yer point?
maybe the point is that China and amrka are not polar opposites, that gradually they are meeting up nearer the middle, and while there are differences, perhaps yankee folk might want to climb down off the high horsie?
which, of course, is a useful humbling of the mind that will come in handy in the months, years, to come.
That's a fairly high premium actually. On investment grade gold and silver here the premium is basically nothing. I can literally use the bank interface, buy gold futures and take delivery. Zero risk of fakes and it will be delivered in an armored truck.
Also, there are no capital gains taxes, so my profits stay mine.
The big thing here is that banks are controlled by the government, in effect the government is pushing the public to buy gold and silver and there is absolutely zero shortage of it. In the US, you have to rely on random stores who may or may not be able to handle the volume you are after and may or may not be willing to sell. Plus you have to deal with absurd premiums at the whim of the seller.
For a large enough volume to warrant delivery by armored truck, being able to buy in person at the bank is kind of a moot point. For volume like that, I'm sure Kitco would be plenty accommodating.
But I do concede that it would be very convenient to buy it at the bank.
I don't think they are talking about Beijing, nor are they talking about empty homes for sale. The report is about "725.5 million mobile population": a more correct english translation (I suspect) would be "Migrant workers". The stats are for rental units for migrant workers, those people probably have homes in the poorer inland areas, but rent places in the coastal cities when working there. 3.8 million is the number of vacant rental units, which indicates that several million migrant workers have gone back to their rural villages and inland cities.
EDIT: and if we look at the numbers, they are saying about 1.4 million rental units are occupied. This indicates there is a 75% vacancy rate for rental housing. If we could find past records fo this time of year, we can determine if this indicates a massive slowdown in the Chinese economy, as it (may) indicate a severe lack of jobs in coastal cities for migrant workers.
Disclaimer: this is my interpretation from this article posted here. I did not manually translate from the original.
Taken from the Google Translated page:
There are two parts to this. On one hand, when they refer to the Beijing office, I would take it the same way if someone refered to the Social Security Administration or some other national governmental office. However, some parts are specific to Beijing.
It seems they did a census of the popultion, finding 9.3 million citizens are living abroad, and 508.9 million people had their information added to the system as they were not recorded previously.
In addition, they are 87.7% complete a Geographic Information System which allows authorities to click on any dwelling on a map, and a list of all the people residing there comes up. It seems 12.3% of residences did not reply to the survey. This was for the City of Beijing only, as far as I can tell.
There are 1.467 million residences within the City of Beijing. The current population of the city is 20.743 million. 12.801 million people in the city are families living together, people living alone is 1.121 million, 6.726 million people are Beijing residents who sometimes live and work elsewhere, while 9.5 million people are migrant workers renting inside Beijing.
These records are also cross-referenced with the date time and type of crime commited to help law enforcement, as well as being used to plan for new schools and hospitals, etc.
Maybe this will make it easier:
From Bloomberg: "Beijing Has 3.8m Vacant Housing Units, Beijing News Says"
In all fairness TD, Bloomberg may be repeating what you said since ZH is the only worthy news source anymore...
I think the number for ~1.4 million residences is Residential Buildings, as opposed to Commercial, Industrial, etc. That number must count an apartment building or condominium as a single "House".
That is how 20 million residents plus 9.5 million migrant workers fit into 1.4 million buildings.
So the 3.8 million units are in Beijing, I was wrong on that part; however, it is not 3.8 million empty houses, if there are only 1.4 million residential buildings; it counts every single housing unit. So a house that is divided into 4 "units" counts as 1 for the first number (1.4million) and 4 for the second (3.8 million).
I was simply confused by the parts where they talk about 725.5 million people and 508 million people, which are clearly national statistics, being mixed in with city-specific stats in the same article.
It would be nice if total number of housing units was known.
If there are up to 30 million people in the city - ~20 million permanent residents and ~10 million migrant workers, occupying 1.4 million buildings minus 3.8 million housing units, we still don't know what the vacancy rate is, and without historical records, no way to compare if this is in fact as bad as it sounds.
I read the google translation of the Chinese article and it made about as much sense as press releases from the NAR. Maybe someone who can read the original Mandarin could get more out of it than I did.
in the event they evacuate japan they will have somewhere to go
"...in the event they evacuate japan they will have somewhere to go..."
The people of Nanjing will welcome them with open arms:
http://en.wikipedia.org/wiki/Nanking_Massacre
Making infrastructure and empty cities, keeping people employed, dumping USDs by stealth while sending some home to roost.
WHY YOU SO WONG.
The idiot Chinese built more houses than their peasants can afford.....just like the USSA.
I have said it before and I will say it again. The world is not suffering from a vacancy crisis but from a homelessness crisis.
We must start to think of our problems in terms of human suffering rather than dollars and numbers. Only then will real solutions with sustinable and equitable outcomes be ahieved.
The vacancies in Beijing represent entrepreneurs gone crazy thinking that capital gains will make them rich. The Chinese have their own tulip manias like everyone else.
Sorry, Peter, it's not that simple. And you're bleeding heart isn't working. Did you watch that Obama thingamagigy video too many times?
how about you set up some cots in your garage for some of them then.
"We must start to think of our problems in terms of human suffering rather than dollars and numbers."
We should declare a War on Unhappiness.
The goal should be to maximize overall happiness. In particular, men desperate for sex should be allowed to rape women if their pleasure outweighs the victim's suffering.
one day you posters may have the realisation that "women" are not a "rape" toy, like so many blow-up dolls just awaiting your dangling appendages.
seriously, every ZH thread has a variant of your post, it's a rather sad state of mind to subscribe to, as history has proven.
irrespective of how some females act, not all females are powerless, some have pride, and integrity.
What I am simply dumbfounded by is that China... communist China... a country with limited enforcement of rule of law, a country with a culture of bribery and corruption, a country that "manages" its data has been seen as the great white hope.
I wouldn't believe a thing I read coming out of China. I won't even eat vegetables or let my children have any toys that have been made there due to the toxins that are being found in their products.
Let's call China for what it is... a threat. Until I see clear evidence that China is embracing legitimate capitalism and rule of law, I am steering clear of China. Investing in China is like investing in a casino.
And investing in the United States is like investing in a ......?
Let's see . . . . 10 murders and 40 shootings in Chicago a few weekends ago. In one weekend. I live there now. In China an 18 year old woman can generally walk down the street, alone, in any big city without being bothered - at 3am. Admittedly that is changing a little now as the price of economic development and slowly liberalizing the police state like Taiwan did. Lived in China for 4 years.
There are lots of problems in China - the environment is terrible, ghost cities, etc. But you talk about bribery and corruption? Where do you live (and invest in a morally pristine way)? I hope it's someplace like Finland, New Zealand, or Andorra. If it's the United Slaves of Amerika or the F. UK or most of the land of Euro-trash, sorry, but they are all more corrupt in many important ways than the Chinese.
Just look at our lying, thieving, fascist Keynesian-in-chief and all the bankster bought stooges in CONgress. They get elected on simpleton rhetoric like "we gotta punish the Chinese". You probably also believe that the world "hates us for our freedoms" (while you get slowly stabbed in the back with another authoritarian law passed by your corrupt overlords here in the USSA). Oh, and let's talk about "managing the data" . . . are you kidding me?
I'm the last one to support the status quo, and I agree with you.
We are dealing with crony capitalism at the top in America... but we do have the right to mobilty, right to certain protection of bank depsoits, etc... It's the best of all of the imperfect systems- sad to say. But when this thing blows up and it will, hedge funds, CDOs and derivatives will be relics of a past era..
I'll reply here, but am addressing your post above - with regards the Chinese "food standards" I would hope you also protect your children, family, from amrkn corporate food, particularly GMO laden garbage - as many nations have taken the steps to do - amrkn food is touted as so advanced, and it's killing the amrkn people, even as they wave their flags. amrka has more "ingredients" that harm, yet do not allow disclosure or truth of this, hiding behind "govt. regulators" such as the "FDA" ect. - propaganda, not truth.
I know you know this, I just wanted to re-mind myself and others.
.
NZ is pretty corrupt, actually. I dont think anywhere isn't. Our current PM is an ex banker who traded against our own dollar for bankers trust during the soros asian currency crisis, who passes taxcuts for the top bracket, while increasing VAT and preaching austerity to those who already have nothing
The ruling party openly takes 'campaign contributions' from the chinese, in return for selling off our assets to them cheap. They actively fuck over credit unions and other non cartel financial institutions, we have troops in the mideast under nato command
corruption is rife amongst mid level civil servants, selling info & kickbacks, even pillars of society like school principals see it as routine.
Sorry, no utopia here. The game fishing is quite good though.
You can't mean that an entire banking industry built upon fraud could be established there? Where robo-signing gets approved by a criminal judicial system, while the foreclosed upon neighbor who steals a loaf of bread for his hungry kids is led to the electric chair? Typical communist traits indeed.
Seems like some corporate oil CEO going vice president and a bankster monster head running the treasury there, right? Or some taxcheating globalist mega-corportation's CEO becoming the personal adviser of their Presidente to further ideas about creating jobs, while cutting a few thousands of them right on the way back from the Red House. Can happen only in such a rotten communist land. Or let them run their SEC-equivalent by some hands right from the field that should be regulated. To be witnessed only there...
Yeah, they might need to massage the annual inflation numbers to manageable levels, and, to balance this welcome adjustment, they'll just make up for a few megatons of fantastic weapons of mass destruction in some remote country rich in oil and far off the major maps. At least the fancy killing toys were sold to them a mere decade or two back by a highly trusted broker, so they should show up somewhere, sometimes.
Great to see we are so much better off. Where a small group of politbureau commissars never will see the slightest chance to loot the country, as the international banksters just won't let them onto their turf.
>I won't even eat vegetables or let my children have any toys that have been made there due to the toxins that are being found in their products
Dead Babies' Flesh Found Smuggled In Drug Capsules
"The capsules were made in northeastern China from babies whose bodies were chopped into small pieces and dried on stoves before being turned into powder"
Source: http://www.huffingtonpost.com/2012/05/07/dead-babies-flesh_n_1495665.html
Comparing burgers to dim-sum. I don't believe ANY number that comes out of China. Then again, I don't believe just about any number that comes out of any government.
FYI: The US has about 18 million vacant homes. There are a lot of homes that aren't listed.
http://readersupportednews.org/opinion2/287-124/9218-american-paradox-18...
FWIW: I see lots of homes that are vacant on my daily commute. Most became un-occupied between 2008 and 2010. Originally there were For-sale signs while they were occupied, but after they left, the for-sale signs disappeared, and the weeds starting growing. I even see one with a small tree growing in the middle of the gravel driveway. I suspect these home are GSE owned and therefore ignored. It would surprise me that the GSE have used a servicer (bank) that is suppose to list them, but the servicer is fraudent informing the GSE that these homes are listed and being properly maintained, which they are not.
Hong Kong Homes Face 25% Drop in Year of the Dragonhttp://www.bloomberg.com/news/2012-01-31/hong-kong-homes-face-25-drop-as...
Another example of EZ Credit and where median house prices are seriously overvalued relative to median salaries from what I have read. I have not been to HK but read the pollution is pretty bad too...maybe Banzai could comment?
Hong Kong is awesome - problem is too many people in a small area. Since HK is on the sea - the pollution is not noticable (unlike the interior of China). Also they have the most awesome airport in the world.
That article is old and housing prices have not dropped yet. The government has taken some measures to reign in price hikes due to speculators and mainland buyers (about 33%). Housing is still not affordable for the majority of the population since the dip in '97 due to SARS. It's flat-high-lining now and the uncles have less money to launder. Pollution has diminished somewhat due to the slow down in production across the border (the local rule of thumb about the state of the mainland economy) due to the prevailing winds and location of factories. A 25% drop is wishful thinking until it isn't. This is a rent-seeking society.
When my HK friends visit LA they exclaim,"the air is so clean here."
I am stunned! as far as the house prices...or should we say apartment prices....when the 'hot money' from the Mainland stops flowing into HK, who knows how far the RE will drop.
Based on this, no one should ever be homeless in China - ever.
maybe a few of their proverbs will see 'adjustments'
“A bride received into the home is like a horse that you have just bought; you break her in by constantly mounting her and continually beating her.”
I heard they're moving the refugees from Fukushima to the "ghost cities" and vacant housing confirm/deny
But, but, but all those tough guys on Fast Money said China would grow at 10-15% every year into perpetuity and you should stay long oil and copper because Chinese demand will forever lift commodity prices. but, but . . .
Yes the Chinese and other Asia languages have the habit of using large numbers in conjuction with a 10,000 mulitplier rather than the 1,000 we use in the west.
Lol .. yes, but they are "investment" properties. Haven't you heard? Why store your money in anything other than something that can never have utility ?
the beijing number is definitely not right.
china's biggest problem is most of the rich people, regardless how they got rich, usually want to move abroad. because of this, the luxury real estate price level is not as high as that of HK, NYC or Tokyo. but most of the luxury apartments are sold but vacant, while luxury neighborhood in LA, australia are full of chinese in sports cars.
it's a different bubble.
I’ll move there and buy one if they will offer me a job that pays $25 per hour, in gold.
The new proposed Party Order #2012-#7-#1 is that every Party member has to get at least ten mistresses. Problem solved soon.
They built that housing for the Japanese evacuees and the foreign emigrees. Didn't you apply for your visa yet?
"Didn't you apply for your visa yet?"
Handwritten application forms are no longer accepted by some consulates.
You must fill out the on-line application form and print it out.
Experience China for yourself, if only to see the difference between a generally optimistic police state and a generally pessimistic one.
Not trying to say there is not a housing glut in Beijing, but you need to put things into perspective:
Beijing has about 23 million people and is about 6500 square miles. Compared to a city like New York City with 8 million people and 470 square miles.
Beijing, being similar to Washington D.C. as a capital city, is home to many transiant people in various businesses and government roles. when I grew up and lived in the D.C. area (N. VA and MD) I came to realize that the local population was not too much larger than the population of transiants.
Just keeping it real.
http://www.youtube.com/watch?v=3UFotSyaW_I&feature=plcp
There is no bubble here. Move along.
You sound like Greenspan, 2005..."there's no bubble in housing...."
This is especially great news for our bud Simon, as it means we can get great, cheap housing in the freedom of China. Only, I can't get out of my committment to Jenna Bush for the 3 acres I'm sharecropping from her in Paraguay. Sorry Simon, I can't move for another 55 years.
http://vegasxau.blogspot.com
The article is a little confusing since it talks of a commuter population of over 700m - this is clearly not specific to beijing; also over 500m newly registered people - again, not beijing specific. The 3.8m empty apartments does seem far too high, especially given a population of 20m. However, given that there are few other avenues to invest money, its not unreasonable to think that 20% of the city's population have bought a second home, and keep it empty, to try to store value.
Whether you believe this to be sensible or not, you simply cannot compare to the US - its Apples Vs Oranges. Most Chinese outright own these investments. There is no mortgage to default on; or those with mortgages must put down 60% collateral for a second home. The big difference being therefore, that there is not nearly the same pressure of forced selling in a downturn. And since there are few other avenues to invest, they are quite happy to sit on the investment (often it'll simply become the home of their son/daughter or grandchildren)
The danger of the situation however is the potential of a property tax (which has been spoken about for a few years) - this would catch out a lot of investors, but since many gov officials probably own several properties.... i can't see this levy being passed as a bill
Yep, due to the new 100 day initiative of wiping out illegal workers / foreign trash / rebel scum)
725.5 million migrant/ 'non hukou' (temporary residents nationwide).
508.9 million newly registered over this period, as the initiative is not limited to Beijing in scope.
The rest of the data is Beijing specific.
In excess of 1903 cases of crimes have been reduced, including arrests and detentions. Beijings' community crime incidence fell by 9.9%, burglary cases fell by 9.6%, car theft 15.7%. I guess quite a lot of visa overstayers, non-registered and illegally working people have been sussed out or fled.
I had someone knock on my door in Shanghai asking where I was from. They only wanted to know which country, they ticked a box, then they disappeared. Very efficient.
I estimate here in the burbs, I'd say nearly all new developments have 2 vacant apartments to every 1 occupied. And building continues, albeit a bit slower pace than over the last five years.
Over 90% of the vacant dwellings are condos but still they outdid us.
the difference between china and the usa is a hard landing in china means a fall to 5% growth on a 5 trillion dollar economy and a crash in the usa is a 5% real contraction in a 14 trillion dollar economy most of which is selling microwaved burritos and 32 oz. sodas to a population that produces mostly methane.
china is building for the future while the usa is clinging to past glory(pacific naval dominance was the original source of japan conflict pre ww2).
hopefully my two kids will buy or rent a coupla those aprtments in a few years earning and spending the new good as gold currency.
When China created the Three gorges dam they flooded millions of acres and small farms they promised the farmers that they would relocate them.so started to build concrete rabbbit warrens near major cities for them, Also at that time the factories was booming making trinkets for the world so the housing construction boomed
it turned out that the farmers being mostly illiterate was not happy in the warrens and were mostly unemployable so moved into the slum areas or went out in the country trying to reestablish farms again,, Meanwhile in the cities the world started to slow down on the products China was exporting causing factories to slow down or close thereby releasing workers to return home or just disseapear as they seen fit hence the large amount of empty housing and the slowing down of their economy.
Yet, in the end, no matter how we slice it, unlike rest of the world, China has no debt. Instead, they have lots of cash that the rest of the world is drooling over. More importantly, they have no two party system that is "deadlocked," and all they care about is winning in November, no matter the costs to the country and its people, etc.
In one sense, if supply and demand really works, isn't it better to have more empty houses than not for working poor? I wonder what are ownership percentages for U.S. and China? I've been hearing lately that the super-rich in U.S. are buying tangible assets... Like houses... That were taken away from working and unemployed, etc. Thus, wealth is being transferred even more from the rest to the 1%!!!
In short, I am really worried about U.S. for the first time, ever! I don't worry about China. Who cares how many empty houses or factories they have, etc. We should worry about our empty houses, homeless, often veterans, and empty factories, etc. I often wonder our interpretation of free-world. Is it more free to be begging for jobs or snarled into minimum wages? Even defending our nation has to be contracted out to the poor? Where is this nation heading?
This is apples to oranges and aren't the U.S. numbers most likely a lie? (Not that China's aren't a lie too.)
Simple solution: Chinese buy up empty American homes as investments, Americans buy up empty Chinese homes as investments, problem solved, win-win.