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Old August 31st, 2012, 11:54 PM   #621
hmmwv
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Quote:
Originally Posted by Kanto View Post
Some overbuilding? Huge overbuilding I'd say and it's not a small part of China
Still denying the dangerously low office vacancy rate, huh? Anything else to say except your sensational opinion?

Quote:
Originally Posted by 1Filipe1 View Post
I dont go around preaching about my country at least here buildings arent governmen built and there no sitting empty and im portuguese actually but american at heart love my country i admit the issues with mine not deny it and say a bubble will never burst like others on this thread
Except you go around spreading misinformation about matters you know nothing about. You are the one refusing to accept facts that don't support your argument.
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Old September 1st, 2012, 06:29 AM   #622
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Americans are sensationalizing China's office vacancy rate, I think, but I feel I need to pipe in to say that Chinese cities are at or near the peak of a large real estate bubble. There's simply no way to deny this, and it's common sense, anyway. The bubble WILL burst soon -- it has to.

HOWEVER, one thing China has going for it is that it absolutely has the population numbers to come in and fill up all these buildings once the burst is over and things return to equilibrium. And also, China's property bubble has been spent building large buildings and urban density, so it's really impossible for this investment to be a loss in the long term. Now compare that with the US's decades-long investments in McMansion tract housing in winding exurban subdivisions...
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Old September 1st, 2012, 09:42 PM   #623
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So China is not immune to market forces.
The things is that China is NOT a fully fledged market economy but a hybrid one, the government can do things that would be impossible in other countries. For instance, banking in China is not commercially run, they are state-owned enterprises that are there to provide a service for the people.
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Old September 1st, 2012, 11:21 PM   #624
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Quote:
Originally Posted by VECTROTALENZIS View Post
For instance, banking in China is not commercially run, they are state-owned enterprises that are there to provide a service for the people.
To be more precise, they are state-owned commercial enterprises.

This is a common thing in Singapore (not sure if it applies to the banking sector though). The West has written off such ideology as 'ineffective' but China may well change that.
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Old September 2nd, 2012, 03:30 AM   #625
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Originally Posted by Pansori View Post
To be more precise, they are state-owned commercial enterprises.

This is a common thing in Singapore (not sure if it applies to the banking sector though). The West has written off such ideology as 'ineffective' but China may well change that.
From Wikipedia:

Quote:
The economy of Singapore is dominated by government-linked corporations that produce as much as 60% of the country's GDP. These government-linked companies are owned by a government holding agency, Temasek Holdings.
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Old September 2nd, 2012, 10:35 AM   #626
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This should end this incessant housing bubble argument:

Quote:
Shanghai Pudong is the classic example of how an “empty” urban construction project in the late 1990’s quickly became a fully occupied urban center, with a population today of roughly 5.5 million. A McKinsey study estimates that by 2025 China will have more than 220 cities with populations in excess of one million, versus 125 in 2010, and that 23 mega-cities will have a population of at least five million.

China cannot afford to wait to build its new cities. Instead, investment and construction must be aligned with the future influx of urban dwellers. The “ghost city” critique misses this point entirely.
http://www.project-syndicate.org/com...ephen-s--roach
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Old September 2nd, 2012, 11:04 AM   #627
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It's really a mixed story of course.

You can't really compare Shanghai with empty cities in Inner Mongolia. The risks of building empty cities for future growth in the coastal cities is much less the risk of doing the same in inner China. It will cause problems in the regions where the economic growth isn't as big as in the successful regions.

But is also shows that the empty cities do not necessarily mean that there will be a full out burst of the bubble. Since there's no over capacity in Shanghai there's less risk that a burst will have a big influence on the healthy real estate market. There could be dip, but that's not a problem.

What also should be noted is that it's just not quantity but also quality, especially in the office market. Mori Building, the developer behind SWFC has said that before the tower was constructed that although there were already many offices in Shanghai the total stock of grade A offices was just 10% of the total stock grade A offices in Tokyo. That was the reason why they kept believing in the project when other investors walked away during the Asian financial crisis of the late 1990s. And even though the gap between the 2 cities has become smaller it's still rather big. Also because Tokyo keeps on building big office buildings. If Shanghai wants to become the #1 financial city in the region it still needs to construct more grade A office buildings. There's still a market for these kind of offices. But then again, just building offices won't meet that demand if the quality is not good enough to compete in an international office market.


As for this tower in Changsha it's of course a bit more risky, it's a healthy reaction to have doubts about a project of such scale in one of the not even 2nd tier city in China. If there's a market for these volumes of office space and houses it could also have been done more efficiently in several smaller buildings that could also be constructed one after each other depending on the demand. I doubt that it's will be grade A class building, but that's probably also not needed in a city like Changsha.

All in all the Chinese real estate market cannot be judged by neither "there's nothing wrong" and "there's a huge problem", it's just too complex for simple opinions.
This can only mean that it's a prestige project . Not just to have the highest tower in the world, but also to showcase this new building method.
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Old September 2nd, 2012, 11:57 AM   #628
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There are still 700 million chinese living in the countryside and nearly 20 million moving to the cities each year . The plain area in china is just 12% which in US is 40% if my data source is correct. So I think the skyscrapers in china should be 10 times more than US.

Last edited by q12093487q; September 2nd, 2012 at 01:08 PM.
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Old September 2nd, 2012, 02:37 PM   #629
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I still remember back in 2008 when they said that Beijing had built office towers beyond its needs for several decades and blah blah and just 4 years later they are dealing with a serious shortage of office space in that city.

http://dsg.colliers.com/document.aspx?report=2989.pdf
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Old September 2nd, 2012, 03:47 PM   #630
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Quote:
Originally Posted by 1Filipe1 View Post
I dont go around preaching about my country at least here buildings arent governmen built and there no sitting empty and im portuguese actually but american at heart love my country i admit the issues with mine not deny it and say a bubble will never burst like others on this thread
This person is clearly not very educated. He can't even get his facts straight. His only research is whatever is on CNN. Obviously not the best source of unbiased information.
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Old September 2nd, 2012, 06:46 PM   #631
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Quote:
Originally Posted by RoofHeightMatters View Post
Americans are sensationalizing China's office vacancy rate,
Does not matter who points it out. Facts are that the USA had low top 30 major market vacancy rates, some still are low, and the country has experienced and is experiencing a RRE and CRE bubble deflation which may, if last months figures hold, be bottoming out at last.

Though all of the shadow inventory and lying on bank balance sheets suggests that millions of homes have still to experience price discovery, so this may be another false dead cat bounce.

Everyone use your common sense and a 10 Yuan calculator.

How many people in China can afford a house that costs 3,000 Yuan m2?
How long must they save to purchase such an apartment with 20% or 30% down?

Talk to anyone under 35 and you will quickly discover that few of them can afford a place of their own and won't be able to for decades.

I lived in Los Angeles and the feeling I got there before it fell apart is the same one I get here. People are saying the same things, expressing the same emotions, and behaving the same way.

QED it's a bubble poised to pop.

I see no way for most to buy a place here until prices drop, and that's the most telling fact.
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Old September 2nd, 2012, 06:51 PM   #632
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Quote:
Originally Posted by RoofHeightMatters View Post
And also, China's property bubble has been spent building large buildings and urban density, so it's really impossible for this investment to be a loss in the long term.
Good up to here.

Fact is a bubble means prices go out of whack to the high side and they must correct lower.

When that happens, someone, somewhere, MUST lose money.

The money is lost [actually when the purchase was made], the asset is re-priced at a new, more sane level, millions of Chinese now can afford previously unaffordable apartments, they buy them up and move in.

Yes, developers and local gov'ts will lose money but that's what a bubble means.

Those who made out were the couple in Shanghai on a MNC package who bought in 1999 sold in 2009 and made 500,000 EUROS in pure clean profit.

That's where the money goes from those who lost it.
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Old September 2nd, 2012, 06:53 PM   #633
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Quote:
Originally Posted by VECTROTALENZIS View Post
The things is that China is NOT a fully fledged market economy but a hybrid one, the government can do things that would be impossible in other countries. For instance, banking in China is not commercially run, they are state-owned enterprises that are there to provide a service for the people.
The Chinese government, as the governments in Europe are finding out, is also not immune to market forces.

Governments are not magical money entities.
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Old September 3rd, 2012, 10:26 AM   #634
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One of the main issues is that the Western analyst have been too skeptical about the office market in Shanghai and Beijing. This made people skeptical about any non Chinese predictions on this issue. But that doesn't necessarily mean that the foreign analyst are also wrong when it comes to the real estate markets in tier 2, 3, or even smaller cities.

These smaller cities (in economic terms) are far more vulnerable in a boom economy. China has the potential to have economical growth for several decades, with or without bumps in the road. But the direction of this growth could be quite geographically unbalanced. There will be smaller cities that will be successful, there will be cities that will be skipped by the growth. And there lies the danger in building a supertall in every smaller city. Not every one of those towers will be a success. If that happens too often it will have a dampening effect on the nations economy.
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Old September 3rd, 2012, 12:45 PM   #635
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Originally Posted by Momo1435 View Post
One of the main issues is that the Western analyst have been too skeptical about the office market in Shanghai and Beijing. This made people skeptical about any non Chinese predictions on this issue. But that doesn't necessarily mean that the foreign analyst are also wrong when it comes to the real estate markets in tier 2, 3, or even smaller cities.

These smaller cities (in economic terms) are far more vulnerable in a boom economy. China has the potential to have economical growth for several decades, with or without bumps in the road. But the direction of this growth could be quite geographically unbalanced. There will be smaller cities that will be successful, there will be cities that will be skipped by the growth. And there lies the danger in building a supertall in every smaller city. Not every one of those towers will be a success. If that happens too often it will have a dampening effect on the nations economy.
Shanghai and Beijing are not the only big cities in China. Guangzhou, Shenzhen are already megacities and Chongqing, Wuhan, Tianjin and Chengdu will soon become megacities in ten years time. Then you also have about 20 cities with a population of about 4-10 million which are also quite big cities.

Last edited by VECTROTALENZIS; September 3rd, 2012 at 12:58 PM.
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Old September 3rd, 2012, 04:07 PM   #636
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"in economic terms"

And even then, they might be mega cities in terms of population size, but some of them are still only tier 2 or even tier 3 cities in China. Let alone cities like Changsha, that might have a population of several million but still an economy that runs mostly on manufacturing. These cities are also still small in comparison with the really big cities.

All this makes it very hard to grasp how this development will continue, there's simply no 1 on 1 reference material from past developments in other parts of the world. What we do know is that explosive growth comes with growing pains, that we already see in China. Nobody can't deny that there are ghost cities in some places in the country. And that there are places with a unhealthy high vacancy rate.

There are already success stories next to failures. Claiming that it can only go wrong, or that absolutely nothing is wrong is an over simplification of a complex market.
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Old September 3rd, 2012, 05:42 PM   #637
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All this makes it very hard to grasp how this development will continue, there's simply no 1 on 1 reference material from past developments in other parts of the world.
The asian tigers (South Korea, Taiwan, Singapore, Hong Kong) grew as fast or even faster as China has done is doing. If you want you can exclude Singapore and Hong Kong cause they are city-states. However Taiwan and especially South Korea can be used as comparable refences.
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Old September 5th, 2012, 02:51 AM   #638
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90 days to build this building, i have to see it to believe it !
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Old September 7th, 2012, 07:41 PM   #639
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similar...
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Old September 7th, 2012, 09:18 PM   #640
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NO!
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