Sounds to me like China is trying to solve both of those problems by lowering property scarcity - if this stays controlled it will make properties cheaper so people don’t need to acquire as much debt and it will shrink the real estate sector. Since this housing is built through centralized control and not a market, it should be totally under control.
Obviously something unexpected could happen that blindsides the Party, but it looks like politics is in command and everything is proceeding as expected.
Obviously something unexpected could happen that blindsides the Party, but it looks like politics is in command and everything is proceeding as expected.
I take it you didn’t read the article.
A former Chinese government official said the country’s entire population of 1.4 billion wouldn’t be enough to fill all of its empty houses, Reuters reported, citing a video from the state news agency China News Service.
China’s real-estate struggles rose to prominence in 2021, when industry giant Evergrande became the most indebted company in the world and defaulted.
At the time, there were at least 65 million vacant properties in the country, which would have been enough to house the entire population of France, Insider previously reported.
To me, this seems wasteful. I’m not very familiar with the Chinese real estate market however.
At the time, there were at least 65 million vacant properties in the country, which would have been enough to house the entire population of France, Insider previously reported.
That doesn’t actually mean there are 65 million surplus properties. A vacant house isn’t an unnecessary house. Children move out all the time, families sometimes break up, Chinese citizens currently living overseas or in Europe return home, etc.
I bet there’s actually math for this - I wonder if anyone has calculated the optimal amount of vacancies?
That doesn’t actually mean there are 65 million surplus properties. A vacant house isn’t an unnecessary house.
That is a very good point. I still find it hard to believe that they are making the best use of labor and materials with situations like this:
Ordos, near the border with Mongolia, was meant to hold over 1 million people and become a cultural and economic hub. But by 2016, its population was only around 100,000, and it has been described as “the largest ghost town in the world.”
Sure. The point I was trying to make is that society might be better served by allocating resources to building hospitals or schools or something the community needs instead of housing that the community does not necessarily need because there is already a surplus of housing.
China isn’t really limited by construction resources. There’s a heavier constraint in terms of hospital staff and teachers than there is on construction resources.
Sometimes, you misspeculate. Some developers lost a whole fuck ton of money on the project, but that’s more than made up for if you can turn a profit on projects near big cities (which demand is still sky high for).
Sounds to me like China is trying to solve both of those problems by lowering property scarcity - if this stays controlled it will make properties cheaper so people don’t need to acquire as much debt and it will shrink the real estate sector. Since this housing is built through centralized control and not a market, it should be totally under control.
Obviously something unexpected could happen that blindsides the Party, but it looks like politics is in command and everything is proceeding as expected.
I take it you didn’t read the article.
To me, this seems wasteful. I’m not very familiar with the Chinese real estate market however.
There should always be a reserve supply of vacant properties to give people freedom of movement between regions and cities.
This might be overkill:
That doesn’t actually mean there are 65 million surplus properties. A vacant house isn’t an unnecessary house. Children move out all the time, families sometimes break up, Chinese citizens currently living overseas or in Europe return home, etc.
I bet there’s actually math for this - I wonder if anyone has calculated the optimal amount of vacancies?
That is a very good point. I still find it hard to believe that they are making the best use of labor and materials with situations like this:
Is anyone? If I have to choose between “housing shortage” and “housing surplus” I know which society I would prefer.
Sure. The point I was trying to make is that society might be better served by allocating resources to building hospitals or schools or something the community needs instead of housing that the community does not necessarily need because there is already a surplus of housing.
They’re also building hospitals and schools so…
China isn’t really limited by construction resources. There’s a heavier constraint in terms of hospital staff and teachers than there is on construction resources.
Sometimes, you misspeculate. Some developers lost a whole fuck ton of money on the project, but that’s more than made up for if you can turn a profit on projects near big cities (which demand is still sky high for).
65M is what percentage of 1.4Bn? It’s about 5%.
5% oversupply is pretty reasonable, especially given that the housing isn’t fungible and the populations are more mobile than the houses are.