| I'm not so sure Shanghai is in trouble. It will continue to attract the usual wealthy elites from both home and abroad. The much bigger problem (and bubble) lies in all the provincial capitals and cities that are trying to become "Shanghais" by building ridiculously large luxury condo complexes that almost no locals can afford to live in (Zhengzhou, Urumqi, Xi'an, Chengdu, Lanzhou). I was actually a bit in shock at the number of huge, abandoned buildings in these cities. Like no one bothered to check demand before building a fifty-floor tower! I think Shanghai's image is a bit too important to China for the government to let things get out of hand, but in many other parts of the country, real estate development seems quite reckless and ill-planned. I remember reading somewhere that a big chunk of China's economic boom is tied to real estate development and construction, so if that's the case we had better hope the bubble isn't too big.
My friends (graduate students, young professionals) in Hangzhou complained about the complete lack of affordable housing despite the insane amount of new properties coming on the market there. The attitude in Chinese urban development these days seems to be "why build one, twenty-floor building when you can build twenty thirty-floor buildings, paint them gold, put a big fountain in front, and then sell them all to another wealthy person who will keep them all empty to inflate demand." :) I think the gov't in Beijing has realized this, hence the attempts at more strict control over land use. If it's so easy for developers to get huge plots of land for nothing through corruption and political connections, there is no incentive to be cautious or realistic in their development plans. And few local gov'ts will disagree, because these sorts of wild mega-projects mean construction jobs, not to mention making their district "look modern and wealthy". Sorry for ranting like this, but I'm really fascinated by Chinese urban development and what drives it. And on a completely different note: Wang Jian Shuo, I'd love to read more of your thoughts on the US, not to mention see more pictures, you have a great eye for city scenes and architecture. |
Is the Real Estate Cooling Down?