[CDL.TO]

The hottest market in the hottest economy in the world is Chinese real estate. The big question is how vulnerable is this market to a crash.

One red flag is the vast number of vacant homes spread through China, by some estimates up to 64 million vacant homes.

We've tracked down satellite photos of these unnerving places, based on a report from Forensic Asia Limited. They call it a clear sign of a bubble: "There’s city after city full of empty streets and vast government buildings, some in the most inhospitable locations. It is the modern equivalent of building pyramids. With 20 new cities being built every year, we hope to be able to expand our list going forward."

http://www.businessinsider.com/pictures-chinese-ghost-cities-2010-12

 

[NIL OMNI]

Several reputable articles have appeared on this subject recently, but the attached link is to one of the most succinct I've read in terms of the actual picture on the ground...

http://www.foreignpolicy.com/articles/2010/02/18/chinas_high_growth_ghost_towns

"If you build it, they will come" (?)

 

[Eug]

A small part of this is cultural. An unused home is a better investment vehicle than a used one, strangely enough. IOW, some of these places are specifically built as investments, but if you actually live in it, then the value of the place drops. Leave it pristine, and it keeps its value. So, there is actually an incentive to keep them empty.

 

[Prometheus The Supremo]

A small part of this is cultural. An unused home is a better investment vehicle than a used one, strangely enough. IOW, some of these places are specifically built as investments, but if you actually live in it, then the value of the place drops. Leave it pristine, and it keeps its value. So, there is actually an incentive to keep them empty.

but doesn't a dwelling decay without anyone actually living in it? therefore damaging the investment?

 

[sodapop]

makes sense they have so many vacant homes, the population of china grows so fast that it would probably be more efficient to have homes ready for buyers, i would not want to be one of those people who is one of the first to populate these ghoat cities

 

[Catapult]

I saw some of these when I was in China last. Very strange. I suspect the building of these ghost cities has more to do with land owners, developers and officials making money rather than the communities being built based on market forces.

 

[Prometheus The Supremo]

just a thought, could this be backup housing in case of a war?

 

[Eug]

but doesn't a dwelling decay without anyone actually living in it? therefore damaging the investment?

Not really. They decay with people living in them.

In Canada, most people don't care that much. Slap a coat of paint on it after 3 years, and the value actually goes up, despite the scratches in the hardwood floors and all the holes in the walls from picture frames, knicks in the drywall at corners, and the dirty kitchen exhaust fans, etc.

Remember, many if not most of these ghost cities are in relatively exclusive areas, and I'd imagine it'd be extremely cheap to send someone in every month or so to remove any insects or webs or whatever and to make sure everything is in working order. Run the water and flush the toilets, and what not.

A friend of mine from Vancouver is a businessman and has an apt. in Beijing. He pays a cleaning lady a few hundred a month to clean his place three times a week.

 

[Catapult]

The ghost cities I saw were an hour plus out of Shanghai. A local friend did point out a pair of empty luxury apartments on the river front in Shanghai. Apparently local rich people didn't want to buy them because officials would then know they were rich.

 

[cdr108]

Chines ghost cities??? Is this ghost is devil or some other things? Can you explain it. I never hear about that before. . .

welcome to UT.

'ghost' cities is a term used to mean the city is deserted ... no one lives there