I Ain't 'Fraid a no Ghost (Town)!

[Randy W]

This article pretty well sums up the impression I get of the real estate situation in China (or at least in Yulin). Prices have held steady, even risen a little bit, although there's lots and lots of vacant units to choose from if you want to buy. Our complex is sold out, but several on the east side of town are sitting there mostly (or all) empty. Like jiaying says, it won't do any good to lower your prices when no one's buying - they still won't be buying.

 

We went to visit one today that Jiaying had looked at in 2008 - same price as what we ended up buying, but further outside of town. Only one bus route, and no grocery stores. Looks like she made the right choice there. Ours is thriving fairly well - 2 new grocery stores that are closer to walk to than to get to our car, everything else within an easy trip. Three bus routes, although there's plenty of waiting and often over-crowding.

 

Anyway, to the article -

 

Analyst: I Ain’t Afraid of No ‘Ghost Cities’

 

from the Wall Street Journal

 

 

Western hedge fund managers. . .spooked themselves into believing that a massive oversupply of real estate meant a Chinese economic collapse was inevitable.

 

What happened? Well, housing prices and sales volumes have been steadily rebounding, to the point where the government is now contemplating new cooling measures. So much for the epic oversupply that bears predicted would wipe out growth.

“Hurray for Ghost Cities,” writes the economist and veteran China-watcher Jonathan Anderson in a recent note.

 

. . .

 

They’ve certainly been a black hole, he says, but a hole that has emptied largely into the equally dark vaults of China’s state-owned banks, where bad debts can remain buried for a long time.

 

It's a whole different country, folks. Just watch and wait and see what happens.

[tsap seui]

My hope has always been that China sees what happened in America, learned the lesson from it, and did whatever they could to curb sharp rapid graph line like home price growth. It sickened me to see those dramatic spikes in home prices of a couple of years ago. They are good for the rare few that are savvy enough investors to get in, set a target goal, and sell out while the prices are still rising, but most folks play into the faux dream of riches to be made, jump into the maelstrom, keep waiting for the top and sadly get their asses handed to them by reality (and I mean that word in both it's definitions).

 

As David Clayton Thomas used to sing..."What goes up, must come down, spinning wheel, got to go 'round".

 

I hoist my glass of cranapple with it's splash of pulpy OJ in a toast to slow steady yearly growth of 1-3 percent.....much safer for the truly important masses, more sensical for everyone. To hell with the investors, and Western Hedge Fund managers.

 

That last comment would require a mop to the head from my dear wife, and it's blasphemy to what I was for years. Our home in dear China was never an investment, Wenyan has a couple of those investment homes, but I'm happy our home has just had a slow steady growth, only a modest $25K to $30K growth in the 5 years of owning it. With way too much hindsight, I'll take that anyday over the waterwheel dance. Going in circles never got anyone anywhere.

 

Take care China, don't get sucked into the real estate movie....the plot looks good, but the ending....oh the ending

 

tsap seui

Edited February 27, 2013 by tsap seui (see edit history)

[Mick]

I would be interested in knowing what percentage of Chinese are now using mortgages for home purchases and what percentage are still saving and paying cash. I know in Li's family, the parents new home, the two homes owned by her sister, and the one by her brother, were all paid for in cash. I am just wondering how the prices of the homes, etc. are pushing a change in the cultural tradition of saving and paying cash as opposed to mortgages. When we lived in China most folks still paid cash, but we left there ten years ago. What is it like now?