Even China’s population of 1.4 billion would not be enough to fill all the empty apartments littered across the country, a former official said on Saturday, in a rare public critique of the country’s crisis-hit property market.
China’s property sector, once the pillar of the economy, has slumped since 2021 when real estate giant China Evergrande Group (3333.HK) defaulted on its debt obligations following a clampdown on new borrowing.
Big-name developers such as Country Garden Holdings (2007.HK) continue to teeter close to default even to this day, keeping home-buyer sentiment depressed.
As of the end of August, the combined floor area of unsold homes stood at 648 million square metres (7 billion square feet), the latest data from the National Bureau of Statistics (NBS) show.
That would be equal to 7.2 million homes, according to Reuters calculations, based on the average home size of 90 square metres.
I find it interesting that everyone is calling this bad management when it’s indicating one thing above all:
Productivity has well exceeded the requirements of the population.
People simply don’t need to work that hard anymore, but all industrialized societies, even would-be socialists, simply can’t stand the idea of letting the working class have leisure time.
UBI and robust social safety nets should have started with the industrial revolution. Every time a machine, computer, or now robots, UBI should have increased and been given to more people.
Tax the automation!! Have companies pay employee taxes for self scanners and all automation. Let the workers live, let the machines work.
I look at my own country of Portugal with a massive realestate prices bubble were more than half the youths only leave their parent’s home after they’re 30, more than 50% of recent graduates emigrating when they get their degrees and schools in certain areas lacking teachers because houses there are too expensive for a teacher salary, and think that maybe what China has there is actually good thing, not a bad thing.
Yeah, sure, “investors” are suffering, but why should the other 99% of people care?!
Portugal has preserved beautiful human-scale cities and villages, while most apartments in China are in concrete jungles of tower blocks - you really want to swap one for the other? Sure, solutions are needed, but not like that. Also the chinese housing bubble conned many ordinary people to invest multi-family life-savings, it’s not a 1% thing.
You clearly have never been outside the touristic city centers if you think “Portugal has preserved beautiful human-scale cities and villages” or actually seen the massive destruction caused in any place that had even the most token amount of potential for Tourism were masses of skryscrapers were built (like in Albufeira) or just enormous beach or golf-resorts, or even the city centers were the locals were kicked out and the local businesses died because when every dwelling was turned into an AirBnB, those little neighbourhood shops selling everyday things lost most of their clients.
I’m sure living in the typical “beautiful” 8-story building from the 80s (with such horrible energy efficiency that its significantly colder indoors in Winter than in the equivalent place in Northern Europe) 1h away from the city center were the typical 30 year old lives with his or her parents because they can’t afford their own place with the shit salaries they get from the only kind of work they can find - invariably a short-term contract - even with a bloody degree, makes them feel happy and all nice and warm inside (and people definitelly need that inside warmth when the house reaches 11 C indoors in Winter).
In one of those “horrible” cheap chinese appartments you really can’t enjoy the beauty of the 80s-style fly-by-night-builder appartment built at a time when there were pretty much no building rules, in a residential neighbourhood with insuficient public transportation and having all the freedom and privacy you have when living in your parent’s home in your 30s.
That chinese nightmare is horrible by itself, yet it’s great by comparison with the even bigger nightmare created in lots of countries in the West as governments and central banks turned the housing markets into a money making machine for rentseeking investors, screwing everybody and anybody who wasn’t already a realestate owner when they started doing it, so mostly the young but now things have reached such a bad point that small shops not in prime touristic places can’t even afford to stay open because their rents have become crazy.
Sure, it’s a fucking “paradise” out there for retired owner-occupiers who have cashed in on their overvalued house in the city and moved to the countryside. For the rest, not really - even young adult owner-occupier couples wanting to upsize because they would like to have children (and a 1-bedroom appartment won’t do) can’t because they can’t afford the money to do so: their 1-bedroom is worth a stupid amount but the 2-bedroom is worth a stupid amount too and now they can’t afford the difference.
(Unsurprisingly birth rates in Portugal are low and falling and it’s now one of the 10 most aged countries in the World)
The pure fantasy of affording the absurd mortgage anywhere decent and also having children and actually having a life (a car, a holiday once a year or less, healthy food) were a significant factor in my partner and mine’s recent decision to not have any children. Just not affordable in Spain. We don’t have family to palm kids off on so, what are you going to do? Have kids and starve, give them a subsistence upbringing, or survive and keep our own heads above water?
The exact same thing is happenning in Portugal.
At least 2 decades of measures to pump up house prices (both by boosting the demand side and by limiting the supply side) leading the young adults to either leave the country of refraining from having children, leading to well below replacement birth rates, an aging population and all problems that come from it (I very much doubt that I’ll ever have a state pension from Portugal).
And then on top of that the Global Warming Climate Models predict that almost all of Spain and Portugal (except near the coast) will become a literal desert.
Meanwhile the policians who passed lost of “pro realestate investor” measures to make themselves and their friends wealthier, all the while killing the life opportunities for the younger generations (and “younger” by now means “in your late 30s”), causing the massive age pyramid problems we’re having, put on their most innocent *surprised Piachu* face when talking about the population ageing problem.
In between the countries becoming unaffordable to live and grow a family in for anybody not already well in their 40s and the desertification due to Global Warming we’re completelly totally screwed here in the Iberian Peninsula.
I’ve traveled outside city centres, but neither to commuter towns nor beach resorts, so I’ll believe you and get there is systemic imbalance.
I have lived six months in China, and literally cried when I cycled around new developments and saw the width of the concrete they were laying for roads. That was Shandong - quite similar landscape and climate to Portugal. Their planning is not all crazy, they also preserved some city centres, build metros, and maybe those roads allow potential space for trams or bicycles, but now it’s mostly many lanes of cars, lost the human-scale markets, and I doubt most tower blocks are energy-efficient (anybody know?).
Some people like ‘modern’ concrete lifestyle, the problem is the scale of such construction, and no choice of alternative styles of development (in cities like Glasgow where such construction was a fashion decades ago, now they are demolishing towers due to social failures). Also, many graduates in China have poor job or housing security, there has also been mass over-production of degrees.
(p.s. now I’m in northern europe in a 1930s house, it’s very cold in winter as can’t afford good heating, even with PhD, will get out woolly hats and electric jacket to keep coding at computer … but at least every house is different here, scope to adapt).Well, as I said, the point is not that the kind of housing providion they’re doing in China is great, the point is that it has become shit all over the West (and whilst I mentioned my homeland, Portugal, I also lived in England and it suffered from most of the same problems).
Shockingly even the dehumanised mechanism of housing provision in China might beat the “extremelly insuficient affordable housing provision whilst demand explodes due to realestate being used as investment assets” we seen in many places in the West, mainly because homelessness is even worse that living in a cookie-cutter appartment in a cold oversized appartment building in lifeless suburbia.
They’re both problematic, in different ways, but at least the kind of problem they have in China isn’t going to kill the country in the mid- and long-term by pushing half the young adults to leave the country as soon as they get a degree and pushing birth rates even lower in a country which already had low birth rates and has one of the most aged populations in the World.
I do wonder what’s going to happen to all that property as China’s population hits 700,000,000 or so
Go take a look at Detroit
Looks fine, why?
A lot of developed countries are going to see a decrease in population starting in the next 20 years and that will probably go on until the end of this century.
Our growth-minded economics needs to shift. Maybe we need to focus on how to gracefully decline. A decrease in revenue does not mean a company is not profitable. So that mindset needs to change.
We really need to focus on geriatric care, there will be a lot more old people than young people, so we need some way to get care to all the old people without over-burdening the young. More robots? Or robot-assisted care so that is it not so taxing on a nurse? I recently had to help a neighbor who was in declining health and mind, and man, I do not want myself to be in that state burdening my children and family. So we need some legislature to allow assisted suicide for those with terminal illness so I can go and die with dignity and grace.
Then we need a new de-construction industry that is focused on removing old buildings and old infrastructure and restoring the land back to its natural state. Otherwise we will have a plague of urban decay if that’s not managed well.
Maybe if they actually built these things up to code it would take longer to build them in the first place. These things tend to collapse.
If one crumbles, they can just use the one next door. They have a surplus! /s
That may have been true if this resulted from the operation of a non corrupt free market, but this is instead China.
Is China having a homelessness crisis, economic collapse, or famine?
Yes.
Source?
Housing does not have the conditions to be a Free Market because any one piece of land has a single owner who has the monoply of deciding what’s done with it.
Sure, you can make as many houses you want … in places were nobody wants to live because there are no jobs there … but in practice the housing market is restricted by the ownership of land in those places were people do want to live in (have to live in, even, because the jobs are there), which means the supply of the most essential “raw material” for realestate - the actual land to build the housing in, situated were people need a place to live in - is heavilly restriced.
(In fact if you look at China’s problem, with all the “ghost cities” made by the now near bankrupt building companies, they’re exactly because they tried to work around that huge market barrier to entry by building cities in the middle of nowhere, were land was cheap and easilly available, on the expectation that both people and jobs would come there, and that didn’t work)
Free Markets can only happen in markets were new supply can easilly come online in response to things like price increases or lowered quality by established market players, and that’s markets for things like soap or teddy bears, not things were supply growth is heavilly restricted by land ownership or other similar high market barriers to entry.
Free Market Theory would only ever be applicable in markets with no or very low barriers to entry and only if market actors were rational, and Economists of the Behaviour Economics domain have proven that humans aren’t rational economic actors, not even close: that pseudo-economics bollocks you’re parroting is not only wholly unapplicable to the housing market (which has nowhere the low barriers to entry needed for there to de facto be freedom for market actors) but has even been disproven more than 2 decades ago (funilly enough by a guy who recently got a Nobel Prize in Economics, though for different work) when it was shown experimentally and in many different ways that homo economicus is not at all a good model for human economic behaviour.
This was my point. Thanks for expanding on it.
The world is really lucky that China’s not doing that great at the moment. Not so long ago, China was winning the propaganda war internationally.
You don’t want authoritarianism to win the argument by out-performing democracies.
I agree. I don’t think we had or have anything to fear. The Chinese educational system is built around obedience, cultural homogeneity, and rote learning. Sure, there are fewer protests, and there is less crime, but also a SEVERE lack of innovation. I can count on one hand the number of innovations China has exported to the world in the last decade. Everything they build of note is based on stolen IP and figurative and literal slave labour. The world is finally clamping down on the former, and China’s social progression to a service-based economy is putting an end to the latter. Their comparative competitive advantages are eroding by the day.
and there is less crime
I wouldn’t necessarily bet on this, authoritarian states are breeding grounds for corruption and that in turn fuels crime. I wouldn’t be surprised if China has a problem with criminality that the government, at least on a local level, not only turns a blind eye to but is complicit in.
They’ve hit the middle income trap while simultaneously upsetting all their trading partners. It’s not going to be a pretty fall from grace. Fake numbers saying how awesome things are only work for so long.
I suspect a major reason for Putin’s most recent crimes was to prevent his people learning how much their neighbours are prospering.
Why doesn’t China count as a democracy? People vote and the votes get counted and decide who runs things.
Why doesn’t North Korea count as a democracy? People vote and the votes get counted and decide who runs things. /s
Hmm, why isn’t the one-party state is considered a democracy? Truly baffling.
Why do you think voting for party is the only form of democracy?
Why don’t you?
why dont we want that if its outperforming democracies
Ah the old “ends justify the means” argument. I’ve seen this one before somewhere
“the means”, of course, being out-performing democracies
“the means” in this case would be authoritarian repression.
“The means” always has to be something bad for the “ends” to try and justify reaching for “the means”.
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Can you give a briefer on how it’s outperforming democracies? I don’t mean to be confrontational, I really want to hear why you think that.
i dont have a briefer on how its outperforming democracies, im not the one that came up with that premise
Wait, what? But you said:
why dont we want that if its outperforming democracies
“the means”, of course, being out-performing democracies
I’m missing something here
hyperreality said
You don’t want authoritarianism to win the argument by out-performing democracies.
i argued based on that premise
you can tell because of the use of the word “if” in this sentence
why dont we want that >if< its outperforming democracies
if that premise was nonsense from the start they probably shouldnt have run an argument off it
Show me a single democracy anywhere in the world.
Alright I’ll bite, what makes the world’s declared democracies actually undemocratic in your mind?
Billionaires directly or indirectly buying elections, politicians, drafting policies, funding propaganda, regulatory capture, etc.
The democratic world doesn’t start and end with America
I live in Denmark. All liberal democracies are subject to the whims of billionaires.
Edit: oh wait, you’re Canadian. That’s fucking hilarious.
Sure, and I’ll agree that many places are actual democracies, but that doesn’t mean they’re free from corruption. You’re both sort of right. There are democracies that work. But none of them are without corruption.
The corruption is baked into the system. I did not have anything illegal in mind when I wrote that list.
There can be no democracy without economic democracy.
There can be no democracy without economic democracy.
Economic democracies are even rarer than political ones, and I’m not aware of any actually complete one. Europe still gets you closest, especially Germany and Austria, with very strong co-determination laws, in Germany’s case reserving 50% - 1 board seats for the shop floor council – the workers don’t need much capital in that case to control the company.
And as far as I’m aware there’s not, and never has been, a single country that is not politically a democracy that would be an economic democracy. Certain people might be thinking of state capitalist countries in that context but those never liked worker control of anything, not unions, not shop floor councils, not nothing. They just dressed themselves in it. Ask, random example, Solidarność.
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I love how you’re getting downvoted, likely by people who feel a sense of enlightenment in that they can identify Chinese propaganda that has been pointed out to them as such but have no clue about propaganda originating from their own country or from a country theirs is allied with.
Why is propaganda always the go-to argument? Even if I identify US propaganda, it doesn’t make me more or less likely to hate it, which I don’t, even if I disapprove of some of their measures as much as I do of my own country. It’s such a baffling argument.
Because most people are steeped in propaganda they don’t see.
You say you don’t hate USA. You should. The US state is engaged in several ongoing genocides. Can you name them?
“You should” 😂 Sounds to me like you have an agenda and are spreading propaganda of your own. But please, enlighten me on those genocides with reliable sources.
I have convictions that inform my opinions. I think it’s obvious that any decent person should hate USA, given their many, many crimes.
I guess you could characterize all communication as propaganda, but that seems rather pointless.
It’s not pointless to say that when it’s clear that you want to drive public opinion by only emphasizing and exaggerating the bad without sources. It’s the literal definition of propaganda.
I still welcome that list of ongoing genocides with their credible sources.
I live in Scandinavia. Please enlighten me about my country’s propaganda
Scandinavia is a country?
You’ve generalised the whole world, what’s a few countries?
You’ve generalized my post to completely omit the “or from a country theirs is allied with” so you can cut the smartass act.
According to the Danes, definitely.
Ironically, founded to “stop the encroachment by the Germans” the Kalmar union first had a Pommeranian King, and then a Saxon one.
CEPOS
good to know Earth resources are used in rational and sustainable manner.
The half finished apartment complexes and ones that are collapsing already because they build them with bamboo instead of cement would indicate otherwise. Look up tofu-dreg projects/buildings for a good laugh. So much of the rapid construction done in the last 20-30 years in China is going to be in landfills far before it should be…
It looks like you mixed up the fields for your password and username. TL;DR: you’ve got a password-looking username
Also, I agree with your comment.
This is a feature, not a bug :)
Considering China’s population shrank by nearly 1 million last year and it predicted to drop by ~700 million by 2100.
This is not going to get better.
When you make the only safe place for money real estate, then your corrupt Politicians make that only safe for the wealthy and connected, you end up with a lot of empty useless real estate.
Are you talking about China or Toronto?
Yes
Toronto is arguably an exclave of China. One could argue that Canada is now a colony of the PRC.
Damn… Can’t they disassemble them and ship them in the West?
No thanks, China’s infrastructure is of notoriously bad quality.
You’re thinking of Ikea
We can exchange them for a wobbly CD rack and some of those rancid meatballs.
If you’re American, the problem here actually isn’t the number of residences, there are plenty of those. The problem is that developers only want to invest in single family units or high value apartments. We need policy makers who will actually tax absentee landlords and developers of high value properties to the point that local developers begin seeing more profit in creating affordable housing. In fact, affordable housing can be some of the most profitable even without increased tax burden but try convincing a group of investors that.
The West is not interested in more houses.
For many mainland Chinese people, real estate is the only place they can invest their money. Traditionally and culturally it’s also seen as the only possible way to rise up and do better.
The money export controls make it difficult for the average guy to move his money abroad as well.
So there are many Chinese people putting retirement or family savings into these places because they don’t have other options.
They have also just had a very long run of easy government backed mortgage support, making it a bit too easy to borrow money for these properties.
It’s crazy and doesn’t make long term sense when the number of domiciles exceeds the number of people.
Wait so China might be having an economic crisis in coming years?
A lot of signs point to it already beginning.
This is a quick reminder that (looking at you fellow Americans) authoritarian governments are incredibly inefficient economically at best, are always ran by idiots, and are completely detrimental to everything at worst.
Can… can they move those apartments here?
I’m 99% sure they wouldn’t pass a safety inspection.
No need, just need to force them to sell their property here along with all the other rich people who are holding on to vacant property as an investment. There are plenty of homes in most places if they’d do something like double the property tax on any property that’s vacant more than a few months per year.
If you’d like to die from building collapse, or at the best least have your shit apartment literally falling apart in less than a few years
It’s almost as if the idea of endless growth is a bad one…
but GrOwTh
What will we ever do without gRoWtH
This is important, not least because making the cement and steel for these surplus apartments and associated road infrastructure makes an enormous contribution to global CO2 emissions. Look at how the emissions took off after 2005. So the sooner the bubble bursts, the better for the climate.
Then they’ll expend CO2 removing the abandoned structures, and building other things on top of some of that, and another bubble will be coming down the pipe sooner or later.
We need to fix the systems that let these bubbles occur in the first place
I recall a presentation by a key guy in China’s planning system (NDRC-ERI) - it was clear that their plan all along was for the peak construction to coincide with the peak working-age population - which is why they would never concede to reduce emissions earlier. They had a long-term view including demographics (more than most governments consider), but the process got its own momentum and became the bubble - also related to city-government financing incentives as well as risky tycoons. Now the problem with such over-planning is that the next generation may not thank them for the legacy of this type of construction (and CO2), and prefer to live in smaller houses or away from the coast (as Shanghai, Tianjin, etc. will be flooded due to same CO2), hence as you say even more reconstruction (and more CO2). But the peak has passed, what really matters next is whether India will repeat similar mistakes.
And China’s population is projected to fall under 1 billion again over the next decades, making this a shit show circus. So many apartments bought as an investment will never see any occupancy and will likely just be abandoned. They got entire empty ghost towns already
This is the best summary I could come up with:
BEIJING, Sept 23 (Reuters) - Even China’s population of 1.4 billion would not be enough to fill all the empty apartments littered across the country, a former official said on Saturday, in a rare public critique of the country’s crisis-hit property market.
Big-name developers such as Country Garden Holdings (2007.HK) continue to teeter close to default even to this day, keeping home-buyer sentiment depressed.
As of the end of August, the combined floor area of unsold homes stood at 648 million square metres (7 billion square feet), the latest data from the National Bureau of Statistics (NBS) show.
That does not count the numerous residential projects that have already been sold but not yet completed due to cash-flow problems, or the multiple homes purchased by speculators in the last market upturn in 2016 that remain vacant, which together make up the bulk of unused space, experts estimate.
“That estimate might be a bit much, but 1.4 billion people probably can’t fill them,” He said at a forum in the southern Chinese city Dongguan, according to a video released by the official media China News Service.
His negative view of the economically significant sector at a public forum stands in sharp contrast to the official narrative that the Chinese economy is “resilient”.
The original article contains 346 words, the summary contains 211 words. Saved 39%. I’m a bot and I’m open source!
Nah. China’s urbanization rate is currently 65%. South Korea for comparison has 82% urbanization rate. So the Chinese have plenty more (say, a hundred million or so more) homes to build. The current difficulties are more to do with (i) loss of consumer confidence caused by the leadership’s bad economic management, and (ii) the deliberate restriction of credit to developers because of the government’s concerns about debt.
This analysis reminds me of the hoo-hah about China’s “ghost cities” circa 2010. Those ghost cities ended up being filled up.
There are still vast ghost cities in that country, so no they don’t actually all fill up
Sooo many empty or partially used shopping malls
In China or the US?
Haha both!
I dunno which is worse. The ones in China were never used, just built and left to rot. Many in the US had some decades of glory, then ended up with the same fate.
Enough of them filled up that even the press outlets that pushed the ghost cities narrative most aggressively, like Bloomberg, have run follow-up stories acknowledging it.
Yes, some developments worked out and others didn’t, but building out housing in advance of increasing urbanization is a good thing, not a bad thing. It’s how you avoid housing unaffordability in urban centers, or worse, the rise of slums.
Building housing 15 or 20 years ahead of time isn’t a good thing. When people move in, the places are already old. Apartment buildings deteriorate over time even with no one living in them. It’s clearly wasteful to build them that early and there’s definitely a huge property bubble in China.
It’s not 15 or 20 years ahead of time, though. The “ghost cities” came alive within only a few years; for example, this page points to Zhengdong New District, which was singled out as a ghost city by 60 Minutes in 2013. It had a population of 5 million seven years later. For district development (as opposed to constructing a single building), seven years is nothing.
Coming back to their current property crisis: let’s assume the article is correct that there’s an excess of 7 million homes. We can plug this into China’s current urbanization rate, and suppose China will get to South Korea’s urbanization rate in 20 years (that’s roughly how far they’re behind SK, by GDP per capita). At one home for every 3.5 people, they need 3.4 million homes per year on average. So they have overshot by about 2 years, which is hardly going to make buildings crumble.
Ghost cities are largely American propaganda and most have filled out to well urbanized areas. You can read quite a bit about it on the wiki
Propaganda implies a concerted and deliberate effort. Even your source labels it as media misinformation stemming from gawking curtiosity.
It’s not for them. It’s so they can buy them and charge exorbitant rents to the next generation looking for a place to call their own, but can’t afford one of their own.
There is no next generation to rent them to…China’s population is shrinking.
Doubt they have that multi-generational 4D chess in mind
if only their regime weren’t so repressive, homeless americans would be flocking there for a place to live.
I’m guessing most of those dwellings are in places that don’t have any employment options.
presumably someone is doing upkeep on these buildings, and presumably those someones have needs for other folks to fill
presumably once more folks move there, they will have even more needs for folks to fill
not to mention remote work and all that
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perhaps not, but hey, if a job around here won’t make it possible for you to afford four walls and a roof, then the difference it purely academic.
People like to create things, to do something productive. it’s why NEETs are notoriously miserable people who hate themselves. humans crave to DO something or it torments us to the brink of suicide - and sometimes past it. If only these folks had a place to live and weren’t brutalized by the authorities for daring to attempt to do so, they’ll create productive activities.
Part of the problem of poverty here, also, is that it’s sometimes literally fucking illegal to carry out productive labor activities unless you’re on land that you own or land that is owned by a designated employer. Try growing produce in a vacant lot and you’ll get arrested for trespassing and “vandalism”, and possibly sued by whatever ghoulish real estate holdings firm is hoarding the land.
With an apartment and nothing else, you’ll have a place to go back to while seeking employment OR a place to stage activities with other people. just because I personally don’t have 100% of the answers or the clairvoyant foreknowledge of what someone might be able to do with the resource of just having a space to call their own doesn’t mean that someone else won’t come up with something i’d have never dreamed of. I think it’s not unreasonable to have a little faith in human creativity.
