"There is danger from all men. The only maxim of a free government ought to be to trust no man living with
power to endanger the public liberty." - - - - John Adams

Thursday, July 7, 2011

REAL ESTATE BUBBLE: China's Ghost Towns

The Chinese Property Bubble  -  Will it trigger the next Depression?
Desolate: These skyscrapers should be bustling with life but are instead empty.

The Great Chinese Real Estate Bubble
China's ghost towns:  New satellite pictures show massive skyscraper cities which are completely empty

Are we on the edge of yet another even Greater Depression and economic meltdown?  It has been reported by The Federalist that local Chinese governments have racked up over $2 Trillion in debt that they may have trouble paying.  Now we have entire Ghost Cities.

To keep their economy moving along the Chinese have massively overbuilt housing and public buildings.  There are no buyers, but the Chinese dare not stop building.  If they stop the entire house of cards falls down.  But like all speculative bubbles it will burst.  The question is will the collapse of the Chinese real estate market throw the world into another Depression? 

As sprawling housing developments and skyscrapers in one of the world's most populous countries, these tower blocks and recently-built neighbourhoods should be busy and swarming with people.

But on closer inspection these stunning pictures show elaborate public buildings and open spaces which are left completely empty says the Daily Mail.

The most recent pictures of unused housing emerged as China announced plans to build 20 cities a year for the next 20 years.

And despite pictures last year showing some of the reported 64 million empty homes, Chinese authorities have since erected masses more buildings.

Gillem Tulloch, an aanlyst for Forensic Asia Limited, described one of the areas in Chenggong,  as a 'forest of skyscrapers'.

Unused: Another vacant development in contains hundreds of
unsold new properties
 When asked what has happened in the past six months since the ghost cities were built, he said: 'China built more of them.

'China consumes more steel, iron ore and cement per capita than any industrial nation in history.

'It's all going to railways that will never make money, roads that no one drives on and cities that no one lives in.

'It's like walking into a forest of skyscrapers, but they're all empty.'

Chinese government think tank have warned that the country's real estate bubble is getting worse, with property prices in major cities overvalued by as much as 70 per cent.

Tulloch said that apartments in Chenggong, a fishing village near Hong Kong, were selling for up to $80,000.

He added: 'People there were joking that no one in Denaya could afford to live there. If these apartments sell at all, it is to speculators.'

Of the 35 major cities surveyed last year, property prices in eleven including Beijing and Shanghai were between 30 and 50 per cent above their market value, the China Daily said, citing the Chinese Academy of Social Sciences.

Prices in Fuzhou, capital of the southeastern province of Fujian, had the worst property bubble with average house prices more than 70 per cent higher than their market value, according to the survey conducted in September.

The average price in the 35 cities surveyed was nearly 30 per cent above the market value, the report said.

Property bubble: Zhengzhou New District features vast public buildings that have never been used
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