An estimated 65 Million apartments sit empty in Chinese cities while millions of China’s urban residents live in overcrowded, rented apartments. The scale of China’s housing overstock is like nothing ever seen before.
Many stories and reports have emerged in the past few weeks about China’s scary housing bubble after Moody’s downgraded China’s property sector from ‘stable’ to ‘negative.’ Although it is difficult to understand the scale of how empty parts of urban China really are without traveling there, I found this Australian documentary by Dateline to be particularly illuminating. It provides an accurate idea of the scale of this massive development overstock by walking through a few ghost cities, malls and highrises. Boing Boing describes it below:
It’s symptomatic of the growing divide between China’s rich and poor, which has left many Chinese without adequate housing. Unlike the US bubble, the Chinese property bubble isn’t founded on cheap credit, which makes the analyst hosting the show believe that it won’t burst in the same way as American one.
For more about China’s housing bubble read this discussion between leading researchers and economist from the New York Times: China’s Scary Housing Bubble. The future of urban development in China is both exciting and scary as there is potential for truly innovative cities to develop, however the housing bubble also will have global ramifications if the government of China can not find a way to slow unnecessary growth soon.