Comments by "D W" (@DW-op7ly) on "China Ghost Cities: A Myth?" video.
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@palirvin1871 who says these homes have to have people in them?
But there is an easy fix with the Chinese Government crackdown on real estate m/speculation even after 14 year warning???
The people who are owed homes by these developers can take a higher end home
And the few hundred million rural folks still expected to move to the cities
Can buy these homes built by Developers at a discounted price
👇
Do China’s ghost cities offer a solution to Europe’s migrant crisis?
Even though there are between 20 and 45 million unoccupied homes
across China, which account for roughly 600 million square meters of
uninhabited floor space — enough to completely cover Madrid — these places are not the urban wastelands they are often posited to be.
While many of China’s new cities and urban districts are deficient in people they are not deficient in owners. Nearly every apartment that goes on the market in China is quickly purchased, often at exorbitant prices that commonly range into the hundreds of thousands of dollars. Far from being unwanted infrastructure that could seamlessly be doled out to refugees, those arrays of vacant high-rises are actually the proud possessions of people who paid a lot of money for them.
So why would anyone spend incredible amounts of cash on houses they do not intent to use?
All over the world, the value of property extends beyond the utilitarian function of being a place to live. Real estate is also a vital economic entity that presents an avenue for investment as well as a way of storing wealth — a use of
property that is taken to the extreme in China. “Many Chinese investors are buying property based on expectations of appreciation, and that it is a solid, safe investment that they can easily understand,” said Mark Tanner, the founding director of China Skinny, a Shanghai based marketing research firm.
A full 39 percent of individual wealth in China is kept in housing, and, according to Nomura, 21 percentof China’s urban households possess more than one home. The reasons for this desire to invest in housing often results from a lack of better options. China’s banks pay negative interest and are becoming even more unattractive with the recent wave of currency devaluation. Wealth management products are not fully developed and are highly regulated by the government, and the stock market is viewed to be about as secure as a casino.
Another reason for the sheer number of unused apartments in China is the fact that there is often little financial incentive for owners to do anything with them after purchase.
There is no yearly property tax in China, so vacant properties are not an financial drain on their owners.
Reuters
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@palirvin1871
Do China's ghost cities offer a solution to Europe's migrant crisis?
Even though there are between 20 and 45 million unoccupied homes across China, which account for roughly 600 million square meters of uninhabited floor space - enough to completely cover Madrid - these places are not the urban wastelands they are often posited to be. While many of China's new cities and urban districts are deficient in people they are not deficient in owners. Nearly every apartment that goes on the market in China is quickly purchased, often at exorbitant prices that commonly range into the hundreds of thousands of dollars. Far from being unwanted infrastructure that could seamlessly be doled out to refugees, those arrays of vacant high-rises are actually the proud possessions of people who paid a lot of money for them.
A huge portion of the homes that are purchased in China function very much like stocks or a trade-able commodity. As an incredible number of new apartments are sold as unfinished concrete cavities without any interior fit out or even windows, they are in no way immediately livable. Strange as it may seem, they are very actively bought and sold in this bare-bones form. In fact, investors often prefer them that way. In many ways they are purely economic entities, quantifiable placeholders of value that are traded on the open market akin to precious metals. Just as one doesn't need to mold a piece of gold into something usable, like a piece of jewelry, for it to have value and an economic function, an apartment in China doesn't need to have people living in it for it to be economically viable.
"Empty units leave flexibility for quick sales in a changing market or need to cash in quickly," said Barry Wilson, the founding director of Barry Wilson Project Initiatives, a Hong Kong-based urban design firm.
Another reason for the sheer number of unused apartments in China is the fact that there is often little financial incentive for owners to do anything with them after purchase. There is no yearly property tax in China, so vacant properties are not a financial drain on their owners.
While the potential returns that could be had from renting them out (1 percent or so) is often not worth the hassle - especially because it costs tens of thousands of dollars to construct the interiors of new apartments in preparation for tenants. This is combined with the fact that Chinese homeowners, especially investors who have multiple properties, are remarkably un-leveraged. According to Mark Tanner, over 80 percent of homes in China are owned outright.
This means that most homeowners, especially the big investors with multiple properties, generally don't have any mortgages to pay off or any other leans, so there isn't as much financial pressure to make a profit from these homes in the short term.
Reuters
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