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Sbs Dateline's Documentary On China's "64 Million Empty Apartments"

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http://www.zerohedge.com/article/sbs-datelines-documentary-chinas-64-million-empty-apartments

While Zero Hedge readers have long known about the eerie phenomenon known as China's ghost cities (and ghost malls), Australia's SBS' Dateline has done a terrific documentary on the topic of "64 million empty apartments in China." As each passing day brings more confirmation that not only is China's real estate market one massive bubble, but it is also, as expected, completely hollow, both literally and metaphorically. The full brief clip is a must watch for all those who wonder how central planning manages to hit its goal-seeked and manipulated GDP number each and every quarter .We are surprised that in keeping with the Japanese earthquake economic miracle, China has not destroyed the vacant city yet only to rebuild it immediately.

Is this episode on youtube anywhere?

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Great report from SBS there......

A 64million oversupply in flats is huge....Loved the bearish views of the British property expert on the matter and his quote "If they reduced the prices to zero, then maybe, someone will live in them"

What will be the global implications when the Chinese property bubble bursts???

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Great report from SBS there......

A 64million oversupply in flats is huge....Loved the bearish views of the British property expert on the matter and his quote "If they reduced the prices to zero, then maybe, someone will live in them"

What will be the global implications when the Chinese property bubble bursts???

In the Chinese 'confusion' mindset - the speculators can't resell a place on if anyone has lived in it which is why they are never lived in.

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I reckon manchester must have 10,000 empty appartments...

...all they have to do is lower the price and create £10,000 extra jobs to fill them. ;)

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Great report from SBS there......

A 64million oversupply in flats is huge....Loved the bearish views of the British property expert on the matter and his quote "If they reduced the prices to zero, then maybe, someone will live in them"

What will be the global implications when the Chinese property bubble bursts???

It proves their GDP figures are very unrealistic. Something I have agreed with for about 3 years. The implications: Australia is providing massive mined resources for all of this. So an implosion would have a serious effect on their economy. China has been secretly stockpiling iron ore for years. When they sudenly halt orders, they will demand greater control over Aus mines/better longer term contracts which hold prices down etc. They will have many builders out of work if there is a straight forward burst of the bubble. Perhaps Chinese wage inflation may reverse, giving us more access to cheap chinese goods for a while longer. They import lots of raw materials but not many manufactured goods do they? However, you might find that rolls royce cars in Chichester suddenly has orders falling from their list of Chinese property millionaires. Any other answers?

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Such a massive waste of housing. :(

Amazing that there were no comments below the video. Aussies probably too buy having a barbie.

You need to click the 'comments' tab above the video. :)

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Such a massive waste of housing. :(

You need to click the 'comments' tab above the video. :)

Yes, just found them - what a silly comment system. You can see that Oz is going to crash and burn when China pops.

Did you see the price of those flats - a billion Chinese cannt afford them. I can see huge social problems in China in the decades ahead.

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Yes, just found them - what a silly comment system. You can see that Oz is going to crash and burn when China pops.

Did you see the price of those flats - a billion Chinese cannt afford them. I can see huge social problems in China in the decades ahead.

There are already huge social problems in China.... and as again not everybody is in on the bubble. The mega problem for the wealthy in China is where to park their money. Since inflation is higher than interest rates, since unless you are uberwealthy it is hard to move the money out of the country (HK is a nice money laundering destination) the uber wealthy have to invest in something.

The working poor will be fine, as said ask yourself this why do they work themselves near to death in the factories? They do it so they have some money to invest later on..... what do our youth have in the future 3 years after a NMW job? Nowt!

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It proves their GDP figures are very unrealistic. Something I have agreed with for about 3 years. The implications: Australia is providing massive mined resources for all of this. So an implosion would have a serious effect on their economy. China has been secretly stockpiling iron ore for years. When they sudenly halt orders, they will demand greater control over Aus mines/better longer term contracts which hold prices down etc. They will have many builders out of work if there is a straight forward burst of the bubble. Perhaps Chinese wage inflation may reverse, giving us more access to cheap chinese goods for a while longer. They import lots of raw materials but not many manufactured goods do they? However, you might find that rolls royce cars in Chichester suddenly has orders falling from their list of Chinese property millionaires. Any other answers?

Wikileaks revealed that a US official was briefed by Chinese officials that the GDP figures were "man-made" and "for reference only".

China's commodity imports fell off a cliff in February. If I recall correctly, China takes about 30% of all Australia resource exports, this figure doubled in 8 years (if anyone can be bothered to sift through the spreadsheets - Bureau of Statistics). Removing that from the economy should kill the National Pornband Network funding, with a bit of luck. Oh, and burst several asset bubbles.

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It's more than 64 million. 64 million is likely the number unsold. But when you realise that rich Chinese businessmen are the main purchasers (in cash) of apartments, and they buy them up by the dozens just to show off and look more wealthy. Then you will see it's an even bigger bubble than it seems.

Imagine the effects of a cultural change where it's no longer 'cool' to own property, this would emerge from property ownership spreading out to the working classes as it is currently. Once enough working class people own their own apartments the rich in China will no longer view it as something worth boasting about.

Another issue is in future when the economy eventually goes into recession the businesmen in China will become a lot poorer and maybe sell their property empires.

If you think British people are obsessed with property prices you should see what people in China are like, over here the idea that property could increase by less than 5-10% YoY is a fallacy. As it's been increasing by more than 10% YoY for a long time now in many cities, rents are also increasing and some lucky people who bought early are getting enough in rent to more than cover their mortgages ;)

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It's more than 64 million. 64 million is likely the number unsold. But when you realise that rich Chinese businessmen are the main purchasers (in cash) of apartments, and they buy them up by the dozens just to show off and look more wealthy. Then you will see it's an even bigger bubble than it seems.

Imagine the effects of a cultural change where it's no longer 'cool' to own property, this would emerge from property ownership spreading out to the working classes as it is currently. Once enough working class people own their own apartments the rich in China will no longer view it as something worth boasting about.

Another issue is in future when the economy eventually goes into recession the businesmen in China will become a lot poorer and maybe sell their property empires.

If you think British people are obsessed with property prices you should see what people in China are like, over here the idea that property could increase by less than 5-10% YoY is a fallacy. As it's been increasing by more than 10% YoY for a long time now in many cities, rents are also increasing and some lucky people who bought early are getting enough in rent to more than cover their mortgages ;)

If you want to see a really property bubble in action, look no further than Hong Kong:

Hong Kong property prices

Price rises of 5% PER MONTH and its been like this for some time now. Scroll down to the estates and you see rises of 7-10% in ONE MONTH is not uncommon. It really is hideous. Many apartments sit empty as Chinese investors park their cash and locals get increasingly priced out.

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the reason why there are 64 million empty apartments is that they are building for tomorrow, 5 years, 10 years, not for today. its about building capacity for the future.

the reason why the chinese economy will keep booming is because they are still in the growth stage of their development. they are where america was 80 years ago. china right now is like looking back at a young america.

remember, their gdp per capita is stil $4000. ours is $35,000. if the west is sort of at maximum capacity of our economies then china and india at least have the potential to keep growing all the way up to that level before they themselves reach full capacity.

so when people say the chinese economy is booming and cant last, you have to bear in mind that they are just catching up, and they have decades of growth in front of them. thats not going to end anytime soon.

Edited by mfp123

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the reason why there are 64 million empty apartments is that they are building for tomorrow, 5 years, 10 years, not for today. its about building capacity for the future.

the reason why the chinese economy will keep booming is because they are still in the growth stage of their development. they are where america was 80 years ago. china right now is like looking back at a young america.

remember, their gdp per capita is stil $4000. ours is $35,000. if the west is sort of at maximum capacity of our economies then china and india at least have the potential to keep growing all the way up to that level before they themselves reach full capacity.

so when people say the chinese economy is booming and cant last, you have to bear in mind that they are just catching up, and they have decades of growth in front of them. thats not going to end anytime soon.

Do you really believe that? I suppose the Chinese government has deluded itself that that is what it's doing so you could be sucked in by the lie too.

If the average Chinese salary is about US$7,000 p.a. then there's an awfully big uplift in salaries coming down the track in "5 years, 10 years, not for today" to bring another 64 million folks within grasping reach of these empty apartments. What does an apartment block look like after 5 to 10 years of being mothballed?

I must have missed the "millions of empty housing units in places no-one lives in anticipation of future growth" decade in the USA's history.

No, this is command government's attempt at growth stimulus by building things that there is no demand for. The bloke at the top said that GDP will increase at a steady 8% p.a. and, by crikey, that's what got implemented whether the infrastructure or housing is required or not.

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I must have missed the "millions of empty housing units in places no-one lives in anticipation of future growth" decade in the USA's history.

And the "funded through a toxic cocktail of foreign direct investment, and, domestic capital racing against the otherwise hyperinflationary holocaust induced through a fixed foreign exchange and negative real rate regime" part.

With a 50% down, 50% due within three years funding structure it's easy to see why this has become the biggest ponzi of our age.

Dubai, anyone?

Still, you won't make many friends standing in front of roller-coasters, attempting to stop them by breaking wind.

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. What does an apartment block look like after 5 to 10 years of being mothballed?

After 5 years everything looks like crap, even the expensive ones, probably a combination of air pollution and poor quality construction. Hasn't yet dented the resale value too much though.

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After 5 years everything looks like crap, even the expensive ones, probably a combination of air pollution and poor quality construction. Hasn't yet dented the resale value too much though.

...they don't make 'em how they used to.

Homes need to be lived in or they go stale, damp, weather damaged, then give up and die. ;)

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...they don't make 'em how they used to.

Homes need to be lived in or they go stale, damp, weather damaged, then give up and die. ;)

But if they are lived in, in China don't they also go down in value? Where as if they are empty they just keep going up in value?

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Wikileaks revealed that a US official was briefed by Chinese officials that the GDP figures were "man-made" and "for reference only".

China's commodity imports fell off a cliff in February. If I recall correctly, China takes about 30% of all Australia resource exports, this figure doubled in 8 years (if anyone can be bothered to sift through the spreadsheets - Bureau of Statistics). Removing that from the economy should kill the National Pornband Network funding, with a bit of luck. Oh, and burst several asset bubbles.

Yes and the second largest importer of those resources is Japan , another market on extremely shaky ground.Quite possible a large amount of land in Japan could be uninhabitable for hundreds of years like Chernobyl - none of the commentators have even mentioned this when talking about this 'rebuilding' thats supposed to take the global economy to a permanently high plateau.

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But if they are lived in, in China don't they also go down in value? Where as if they are empty they just keep going up in value?

......I don't really know to be truthful......maybe they are hoping someone rich will come along and pay more than they were going for last week, I can't think who though.....dead money, dying. ;)

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......I don't really know to be truthful......maybe they are hoping someone rich will come along and pay more than they were going for last week, I can't think who though.....dead money, dying. ;)

That sounds like the private equity model, buy something with debt and then hope you can pass it on to another private equity buyer who buys it off you for more all funded by debt. As long as you aren't the chump who's holding the parcel when the party ends your in the money. However as PE manages other peoples money it's not them that will be the chumps finding out the investment they have is worthless.

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  • 312 Brexit, House prices and Summer 2020

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