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China's Ghost Cities: 64 Million Vacant Homes?

Blog by | July 1st, 2011

China's Ghost Cities: 64 Million Vacant Homes?

Those wondering what a true invasion of Asian real estate investors could mean for Canada - or what the peak of a housing bubble looks like - should view the amazing satellite images of China that show new cities that have been left completely abandoned, sometimes years after their construction. (To see the images, Google "China's ghost cities".)

Some estimates put the number of empty homes at as many as 64 million, with up to 20 new cities being built every year in the country's vast swathes of free land. The images show elaborate public buildings and open spaces that are completely unused, with the exception of a few government vehicles near communist authority offices, according to the U.K. Daily Mail. Other photos show rows of high-rise apartment buildings, also apparently vacant.

The satellite photographs have emerged as the Chinese government warns that the country's real estate bubble is getting worse, with property prices in major cities overvalued by as much as 70 per cent.

But a new study released this month, by investment research group CSLA Asia Pacific, said the actual number of vacant homes is a mere 16.6 million. "16.6 million vacant homes isn't all that scary in a population of 1.3 billion," the survey states.

"There aren't millions of poor people buying homes they can't afford. Rather there are millions of rich people buying houses as a store of value," CLSA states, we guess based on what the developers told them. According to them, only 7.8 million homes are built and unsold and another 7.5 million are old vacant public housing units that are likely set for demolition.

The satellite photos, however, show 20 new cities, all with new buildings.
Major Point: 64 million or 16 million? Such is the gap in real information coming out of China, where disinformation flows from the top down. In any case, China has millions of new homes sitting vacant for years and that means billions of dollars that has been lost, by developers and investors. How long will the Chinese wave of buyers keep coming to Vancouver, if the housing bubble bursts in China?