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This is anecdotal, but I'm sure anyone who has traveled around China can confirm: housing is not normal there. On one 5 hour high speed train ride between Shang
by elamje 8y ago
This is anecdotal, but I'm sure anyone who has traveled around China can confirm: housing is not normal there. On one 5 hour high speed train ride between Shanghai and Beijing, I saw no less than 2,000 apartment high rises scattered throughout the countryside, most of which, clearly didn't have tenants - no cars, no laundry hanging out windows, nothing. These are only the apartments I could see from the train too! At some points there were hundreds of identical, 20+ story apartments scattered all over the horizon with very little activity around them. I hadn't seen anything like it in my life. The strangest things I saw were 20+ story highrises just chilling in the middle of crops - no roads leading to them, just standalone in a big field of some crop.
At the time I was weirded out, and upon further research it seemed like there was and is something more systemic going on that we can't wrap our heads around.
I know this is very anecdotal, but I was hoping to get some comments from others that have travelled around China to see if they have noticed similar things.
- guiomie 8y agoI can attest seeing the same thing on the same train ride 6 years ago. You could see the sun go thru the buildings, and i was obvious they were empty. I did the same ride 1 month ago, and I did see tons of big buildings, but this time they did not seem empty, might be a visibility thing tho.
- throwaway2048 8y agoChina is definitely a cautionary tale that just building extra housing, even absolutely absurd amounts of extra housing to the tune of tens of millions of extra unused units, isn't enough to address the affordability in housing crises. The problem in China, like pretty much everywhere else, is treating housing as a "surefire" speculative investment that is always increasing in price.
- ericd 8y agoSure. You also need high enough property tax rates that it’s not attractive as a speculative investment. But in China’s case, it seems like it’s a glut of money seeking a place to sit that doesn’t have other safe places to go. I’m guessing the values will crater, as the housing supply glut eventually does its job.
- TulliusCicero 8y agoI mean, it sounds like there's a glut of unused housing kind of in the middle of nowhere, not in desirable cities like Beijing and Shanghai. Building massive amounts of housing in the central valley wouldn't help the housing problem in the bay area.
- vorg 8y agoBut making the Central Valley as desirable as the Bay Area to live in would help the housing problem. Do this by building not only housing, but better infrastructure (roads, rail, schools) and create incentives for Bay Area businesses to relocate there (including the stick for those that don't).
- comicjk 8y agoForcing companies to spread out doesn't make sense - they get value from being close together. The network effect is much more important than infrastructure.
- TulliusCicero 8y agoExactly. The Central valley is already cheaper than the bay area. The fact that tech companies aren't relocating out there tells you something.
- TulliusCicero 8y agoWhat's the point in doing this? The bay area isn't dense at all, building up would be easy, and better for the environment to boot.
- burfog 8y agoCouldn't you live in the mountains? Where will we grow food? Already, the Bay Area development ruined some of the world's best farmland. There was no better place to grow apricots than San Jose, and now that is gone forever. Central Valley farmers feed the nation and beyond.
- bigbassroller 8y agoYes I witnessed the same thing while visiting 2 years ago, riding the high speed rail from guangzhou to Guilin. Being from California, the experience of riding HSR and seeing too much housing seemed like the polar opposite of California. The documentary, The Chinese Mayor is an interesting watch on the topic: https://m.youtube.com/watch?v=u06a9Nb2GsU https://m.youtube.com/watch?v=u06a9Nb2GsU
- magduf 8y agoMaybe they're preparing for a huge influx of migrants driven from coastal cities by sea level rise.
- seanmcdirmid 8y agoNot that I disagree, but those could also be farmer or fisherman housing, or remote compounds (think remote military or university campuses). The ones around Beijing are usually inhabited in some form or another, even though they are in the middle of farmland or abutting mountains. My wife has an aunt who lives in an apartment complex in the middle of nowhere near leiyang Hunan. This was because it was what the Energy SOE her aunt was working for required them to live.
- braunshedd 8y agoI spent ~2 years in mainland China (Zhengzhou, where iPhones are assembled). The number of 15+ story apartment buildings along major freeways was astounding -- all of them seemingly empty. When in China I was told this is driven by a combination of two things: 1. The average person in China does not believe in investing in intangible assets. This means the stock market is not appealing, so they all pile into the best physical investment around -- housing. 2. Owning your home and a car before marriage is considered 'mandatory' in traditional Chinese culture (for men). If you forego this you have what's known as a 'naked wedding' -- not good. Renting doesn't count. Excess housing means the average rental yield (rent / property cost) is so low that it's not worth finding tenants. Examples include $300k condos renting for ~200 USD / month.
- bobthepanda 8y agoThe Chinese stock market is not incredibly appealing given the constant whiplash and regular confidence crises in listed companies. But it is difficult, if not impossible, for your average Chinese person to invest outside of the country. Housing is used as an investment vehicle in the US, but the amount of capital sloshing within China looking for a return makes the effect much worse over there.
- AJ007 8y agoThat probably means the actual value of those condo units is $50,000, assuming the income holds up and the population keeps increasing. The big question to me is if the properties can even be maintained.
- taurath 8y agoI have noticed that chinese owned apartment buildings in other countries tend to stay empty for very long periods of time and renting at too high prices. Instead of lowering prices and getting some income, they frequently just sit empty and not serving the communities they're in.
- sjjshvuiajhz 8y agoIsn’t it a colossal shame that in China we have thousands of empty high rises, and in the Bay Area we have a housing crisis where you can find a dozen people packed into a single family home? Both a result of obviously broken policy choices on both sides of the Pacific. Hell, the Chinese are even willing to buy property here! But instead of us building high rises to sell them, so there would be plenty of housing to go around (and improve the trade balance to boot), they are bidding up the prices of those single family homes.
- Taylor_OD 8y agoHow long can an apartment/building sit un/under utilized before it's value decreases significantly? Does the future of China's economy depend on the countries ability to help people earn a living that allows them to move into those apartments?
- pound 8y agoHere is video from serpentza/cmilk (2016) https://www.youtube.com/watch?v=BcyYyyaPz84 https://www.youtube.com/watch?v=BcyYyyaPz84 talking a bit about it. Basically this is investment, with money often coming from the whole family. No one really lives there. In majority of cases even finishing touches on properties would be unwelcome as it will lower resale value. They are being built everywhere (helps with GDP too). And plenty of developers are struggling with sales of new stock.