China’s real estate market is mad and the buyers are equally crazed. Property, even though only the government owns land and you get long-term leases, is the investment. I know people who have three or four houses, each often costing a few million renminbi. And they pay cash or have little in the way of mortgages.
They buy properties on the outskirts, in massive developments away from city centres where people say the air is cleaner but no one goes to live. There’s often a mad rush at the opening when developers offer special prices and such.
A friend and his girlfriend went to the sales of the athletes village apartments built for the Asian Games. The buildings were nice but out in the boonies, away from transportation and just about everything else. They were a good hour’s drive in traffic to downtown.
People snapped up the apartments like they were the last shrimp at a buffet. But as in many other developments, the apartments will stay vacant, the owners waiting for the day the value goes up enough to sell. I asked my friend why they went and he said for investment. I asked why anyone would buy an apartment in a building where no one lives or is going to live, and said it made no sense. Who was going to buy the apartment? It has to end somewhere. There’s a massive adjustment coming.
Here’s an interesting and short documentary from SBS Australia.
Riding through large empty complexes, weeds growing up through never driven on pavement is a fun thing at night. Here’s a perfect song for times like that – Ghost Town by The Specials.
Originally posted April 11, 2011