Large number of incomplete buildings in China

In My Humble Opinion
1

Just back from Shenyang in Northern China and was really surprised at the very large number of enormous apartment towers apparently incomplete and abandoned. The concrete is usually complete but the buildings have no windows and have clearly been in that state for a while. If you took a photo of the Shenyang skyline you would be truly impressed by the number of cranes attached to buildings under construction, the thing is the overwhelming majority of these cranes do not move, and look like they haven’t moved in a long while.

While I’m happy to accept that the Chinese build infrastructure in advance of increases in population and demand, the sheer number of these buildings standing unoccupied (and the consequent drain on budgets when capital is tied up in assets without any hope of a return being generated) seems to be unsustainable. If China’s growth figures have been based on this kind of construction then I suggest a major correction is on the cards.

So how does this happen? How do you get to build a compound of 8 sixty story apartment blocks without any accountability for completion or populating them?

2

No idea, but apparently, it’s not that uncommon around the world.

3

The Chinese asked their middle-class citizens to essentially invest their retirements into funding these construction projects.

There is a giant real estate bubble in China, and when it pops, the devastation for the Chinese will be catastrophic.

(This is why so much of the wealthy Chinese money is now buying American property)

4

Probably the Condo boom. There is same problem in the US and Canada. Just go to Miami or Fort Lauderdale.

Same thing in Toronto or Vancouver. They built way too many of these Condo than demand for it.

In New York city the same thing.

5

This is pretty much the explanation. China had a real estate bubble just like everyone else did. And when China does anything, it does it big, so the fallout from the bubble bursting was particularly bad for them.

6

Not just empty buildings, China has ghost cities:
[ul]
[li]http://www.businessinsider.com/chinas-ghost-cities-in-2014-2014-6[/li][li]http://www.news.com.au/finance/china-building-mega-cities-but-they-remain-empty-sparking-fears-of-housing-bubble-burst/story-e6frfm1i-1226611169281[/li][li]http://www.forbes.com/sites/realspin/2013/10/28/in-china-theres-not-one-city-sans-terrifying-stretches-of-empty-houses/[/li][li]http://io9.com/chinas-brand-new-abandoned-cities-could-be-dystopian-m-1238731420[/li][/ul]

7

Got a cite for overbuilding of condos in New York. The Times seemed to have missed it. It is certainly not the case in Silicon Valley. Lots of construction, which takes time, but the new housing gets filled - as the traffic I put up with every evening attests to.

8

Well, China has a plan to urbanize the country. The plan for 2014-2020 is by 2020 the country will have 60 percent of its people living in cities, up from 53.7 percent now. That works out to about 80 million people, or about 15 million a year or about 40,000 people A DAY!

Where are they all going to live? Imagine all the apartments needed, maybe 10-20 thousand finished every day. It’s hard to say exactly how the ghost buildings and cities enter the equation, but I don’t see how they can be empty for long. The demand must be enormous, and it’s hard to see how there could be many unsold flats over the long haul.