Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

China Property Collapse Has Begun
Forbes ^ | April 13, 2014 | by Gordon B. Chang

Posted on 04/15/2014 8:03:31 PM PDT by Oldeconomybuyer

Nothing is going right for Hangzhou at this moment. Walmart will be closing its Zhaohui store in that city on April 23 as a part of its overall plan to dump marginal locations—about 9% of the total—in China.

Thanks to the world’s largest retailer, another large block of space in Hangzhou, the capital of Zhejiang province, will go on the market at a time when there is generally too much supply. The problem is especially pronounced in the city’s premium office market. Hangzhou’s Grade A office buildings at the end of 2013 had, according to Jones Lang LaSalle, an average occupancy rate of 30%.

The real weakness, however, is Hangzhou’s residential sector. The cause is simple: massive overbuilding. Sara Hsu of the State University of New York at New Paltz writes that Hangzhou faces “burgeoning swaths of empty apartment units.”

(Excerpt) Read more at forbes.com ...


TOPICS: Business/Economy; Foreign Affairs; News/Current Events; Politics/Elections
KEYWORDS: china; chinacrisis; hangchow; hangzhou; housingbubble; otherpeoplesmoney; propertybubble; redchina

1 posted on 04/15/2014 8:03:31 PM PDT by Oldeconomybuyer
[ Post Reply | Private Reply | View Replies]

To: Oldeconomybuyer
Walmart will be closing its Zhaohui store.

I'm sure Zayre or maybe G.C. Murphy will fill the void.

2 posted on 04/15/2014 8:05:16 PM PDT by re_nortex (DP - that's what I like about Texas)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Oldeconomybuyer

This cannot be good - the king pin is about to fall.


3 posted on 04/15/2014 8:06:37 PM PDT by impactplayer
[ Post Reply | Private Reply | To 1 | View Replies]

To: Oldeconomybuyer
and the ghost cities aren't even mentioned...
4 posted on 04/15/2014 8:09:17 PM PDT by Chode (Stand UP and Be Counted, or line up and be numbered - *DTOM* -vvv- NO Pity for the LAZY - 86-44)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Oldeconomybuyer

suppose they will want to collect on the US notes they hold??


5 posted on 04/15/2014 8:10:36 PM PDT by elpadre (AfganistaMr Obama said the goal was to "disrupt, dismantle and defeat al-hereQaeda" and its allies.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: re_nortex

Montgomery Wards wants the China locations ...


6 posted on 04/15/2014 8:12:16 PM PDT by Oldeconomybuyer (The problem with socialism is that you eventually run out of other people's money.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: Oldeconomybuyer

You know Communism is dead when China’s once red hot real estate market is headed for a crash.


7 posted on 04/15/2014 8:13:44 PM PDT by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Oldeconomybuyer; Revolting cat!
Tim-berrrrrr!


8 posted on 04/15/2014 8:20:49 PM PDT by a fool in paradise (The new witchhunt: "Do you NOW, . . . or have you EVER , . . supported traditional marriage?")
[ Post Reply | Private Reply | To 1 | View Replies]

To: Oldeconomybuyer

Former US cattle ranches a steal for chinese middle class suburbia.


9 posted on 04/15/2014 8:23:04 PM PDT by SpaceBar
[ Post Reply | Private Reply | To 1 | View Replies]

To: Oldeconomybuyer

The Chinese are buying up real estate in this country at a record rate. I know r.e. lawyers who say they handle closings where mainly Chinese is being spoken.


10 posted on 04/15/2014 8:25:00 PM PDT by ladyjane
[ Post Reply | Private Reply | To 1 | View Replies]

To: a fool in paradise

Dammit, I told everybody not to lean on it!


11 posted on 04/15/2014 8:26:01 PM PDT by headstamp 2 (What would Scooby do?)
[ Post Reply | Private Reply | To 8 | View Replies]

To: Chode

yeah i do not get the whole ghost cities thing. building just to build stuff they won’t let anyone use.


12 posted on 04/15/2014 8:28:16 PM PDT by Secret Agent Man (Gone Galt; Not averse to Going Bronson.)
[ Post Reply | Private Reply | To 4 | View Replies]

To: ladyjane

Isn’t that what happened with the Japanese right before their financial crash? Everyone was worried about them buying up American properties and then boom, they fell through the floor


13 posted on 04/15/2014 8:28:36 PM PDT by McGavin999
[ Post Reply | Private Reply | To 10 | View Replies]

To: Secret Agent Man
the pictures of them are stunning and spooky as hell...

but apparently they aren't entered into the bubble equation, go figure

14 posted on 04/15/2014 8:33:20 PM PDT by Chode (Stand UP and Be Counted, or line up and be numbered - *DTOM* -vvv- NO Pity for the LAZY - 86-44)
[ Post Reply | Private Reply | To 12 | View Replies]

To: a fool in paradise

At least those buildings are far enough apart that they avoided the domino effect. Who says the Chinese don’t plan things well?


15 posted on 04/15/2014 8:34:29 PM PDT by Fresh Wind (The last remnants of the Old Republic have been swept away.)
[ Post Reply | Private Reply | To 8 | View Replies]

To: a fool in paradise

It’s going down, I’m yelling “TIMBER!”....


16 posted on 04/15/2014 8:35:03 PM PDT by dfwgator
[ Post Reply | Private Reply | To 8 | View Replies]

To: re_nortex; Chode

Maybe J. C. Penney’s will purchase it?


17 posted on 04/15/2014 8:39:01 PM PDT by SgtBob (Freedom is not for the faint of heart. Semper Fi!)
[ Post Reply | Private Reply | To 2 | View Replies]

To: Oldeconomybuyer

America should start buying property in China with the money we borrowed from them. Then, at least when they confiscate foreign owned property, we can call it settled debt at whatever price they say the real estate is worth.


18 posted on 04/15/2014 8:40:11 PM PDT by Tenacious 1 (My whimsical litany of satyric prose and avarice pontification of wisdom demonstrates my concinnity.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Oldeconomybuyer

Schadenfreude.


19 posted on 04/15/2014 8:42:05 PM PDT by greeneyes (Moderation in defense of your country is NO virtue. Let Freedom Ring.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SgtBob
can't be any worse than their current business strategy... 8^)
20 posted on 04/15/2014 8:43:07 PM PDT by Chode (Stand UP and Be Counted, or line up and be numbered - *DTOM* -vvv- NO Pity for the LAZY - 86-44)
[ Post Reply | Private Reply | To 17 | View Replies]

To: Oldeconomybuyer

That’s ok. They will all be moving to their new homes here soon anyway.


21 posted on 04/15/2014 9:00:20 PM PDT by MarMema (Run Ted Run)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Oldeconomybuyer

US property law, as recognized internationally, has few restriction on foreign national ownership of land free and clear. That should be changed.


22 posted on 04/15/2014 9:04:18 PM PDT by SpaceBar
[ Post Reply | Private Reply | To 1 | View Replies]

To: ladyjane
The Chinese are buying up real estate in this country at a record rate. I know r.e. lawyers who say they handle closings where mainly Chinese is being spoken.

This is why they are buying US property. The California bubble peaked out about 5X average annual earnings. Housing in Beijing has gone up to about 18X annual Chinese earnings, or worse. Smart Chinese (or just corrupt) who made money during this boom have known prices are rediculus there, and that is why they started buying everywhere else.

After China crashes, they can sell their assets here, and move the money back. They will likely lose money on the American real estate, so I am not worried about them buying up America. In fact, we will be getting a lot of cash back for free.

23 posted on 04/15/2014 9:08:45 PM PDT by Vince Ferrer
[ Post Reply | Private Reply | To 10 | View Replies]

To: a fool in paradise; All

Where and when was this collapse? Was it earthquake related?


24 posted on 04/15/2014 9:10:26 PM PDT by gleeaikin
[ Post Reply | Private Reply | To 8 | View Replies]

To: Secret Agent Man
yeah i do not get the whole ghost cities thing. building just to build stuff they won’t let anyone use.

In China some have lots of cash with cheap land, materials and labor why not build for investment? Hoping that someday there will be a middle class.

25 posted on 04/15/2014 10:10:58 PM PDT by Mike Darancette (Do The Math)
[ Post Reply | Private Reply | To 12 | View Replies]

To: Mike Darancette

yeah but some of that infrastructureis gonna decay from lack of use too. and considering building practices there,if stuff does getused andhard due to large population, it’ll breakdown big time.


26 posted on 04/15/2014 10:16:44 PM PDT by Secret Agent Man (Gone Galt; Not averse to Going Bronson.)
[ Post Reply | Private Reply | To 25 | View Replies]

To: Secret Agent Man
it’ll breakdown big time.

It is probably insured.

27 posted on 04/15/2014 11:08:21 PM PDT by Mike Darancette (Do The Math)
[ Post Reply | Private Reply | To 26 | View Replies]

To: Vince Ferrer

This is what happened with the Japanese during the 80s. They purchased real estate at the market peak here and then when their liquidity crisis hit they had to do a fire sale of those assets.

The Chinese will probably sell their bond holdings as well at a steep discount.

There will be negative effects here. It will drive down real estate prices and the rising bond yields from discounted bond sales will drive the rates higher on new bond issues.


28 posted on 04/15/2014 11:19:23 PM PDT by KamperKen
[ Post Reply | Private Reply | To 23 | View Replies]

To: Oldeconomybuyer

How do ypu translate Potemken in to Mandarin?


29 posted on 04/16/2014 12:36:42 AM PDT by Organic Panic
[ Post Reply | Private Reply | To 1 | View Replies]

To: Vince Ferrer

I can’t wait to hear them start to scream on property taxes that are tied to the ‘perceived value’ of the property they will now own in the U.S.


30 posted on 04/16/2014 4:59:20 AM PDT by The Working Man
[ Post Reply | Private Reply | To 23 | View Replies]

To: Oldeconomybuyer

Not to worry...... time will solve the problem as it did in Houston.

If you build it they will come still applies


31 posted on 04/16/2014 5:01:14 AM PDT by bert ((K.E. N.P. N.C. +12 ..... History is a process, not an event)
[ Post Reply | Private Reply | To 1 | View Replies]

To: re_nortex

bump


32 posted on 04/16/2014 5:10:02 AM PDT by WashingtonSource
[ Post Reply | Private Reply | To 2 | View Replies]

To: ladyjane

“The Chinese are buying up real estate in this country at a record rate.”

That’s a fact. The ChiComm crony capitalists are looking for safe shores to invest and hide their ill-gotten cash. They are also making real estate investments in Hong Kong and London. Realty is quite fungible for the ChiComms. They will sell real estate investments overnight if conditions become unfavorable and invest that cash in another real estate venture of a different country.

The UK is currently selling visas to wealthy ChiComms for £2.2 million a pop, with a required additional investment of £500,000 to a designated “charity.” I believe that the US offers a similar deal although I haven’t found proof of that yet.


33 posted on 04/16/2014 7:36:00 AM PDT by sergeantdave
[ Post Reply | Private Reply | To 10 | View Replies]

To: gleeaikin

Chinese apartment building fell over before anyone moved in. Poor construction job.

But oh that bubble housing market economy!


34 posted on 04/16/2014 9:29:00 AM PDT by a fool in paradise (The new witchhunt: "Do you NOW, . . . or have you EVER , . . supported traditional marriage?")
[ Post Reply | Private Reply | To 24 | View Replies]

To: Vince Ferrer
This is why they are buying US property. The California bubble peaked out about 5X average annual earnings. Housing in Beijing has gone up to about 18X annual Chinese earnings, or worse. Smart Chinese (or just corrupt) who made money during this boom have known prices are rediculus there, and that is why they started buying everywhere else. After China crashes, they can sell their assets here, and move the money back. They will likely lose money on the American real estate, so I am not worried about them buying up America. In fact, we will be getting a lot of cash back for free.

The Japanese would have done better holding on to their American assets. I expect the Chinese will be buying inflated Chinese assets all the way down. In Japan, "all the way down" meant a 90% drop from top to bottom, with no inflation adjustment. Of course, Japan real estate fell steeply because Japanese output per capita had caught up with the US, so the easy growth (from adopting or reverse-engineering US tech) was behind it. China's is about 1/6 or 1/7.

35 posted on 04/16/2014 2:03:22 PM PDT by Zhang Fei (Let us pray that peace be now restored to the world and that God will preserve it always.)
[ Post Reply | Private Reply | To 23 | View Replies]

To: gleeaikin
Where and when was this collapse? Was it earthquake related?

The building was built first, then the excavation for the parking garage started. Canal and rain soaked earth on one side and a void on the other. Nature stepped in.

36 posted on 04/16/2014 8:34:52 PM PDT by Professional Engineer (No $#@t there I was...)
[ Post Reply | Private Reply | To 24 | View Replies]

To: Professional Engineer
also the round pilings used in it were hollow, not filled with steel and concrete as they should have been there is a long article on it somewhere on the net

how would you like to be living in one of the other sister buildings? lol...I think they tore them all down but don't remember

37 posted on 04/16/2014 8:49:42 PM PDT by rolling_stone
[ Post Reply | Private Reply | To 36 | View Replies]

To: Professional Engineer

http://www.hoax-slayer.com/13-story-buliding-collapse-china.shtml


38 posted on 04/16/2014 8:51:17 PM PDT by rolling_stone
[ Post Reply | Private Reply | To 36 | View Replies]

To: Professional Engineer; rolling_stone; All

My first thought was, what kind of idiot doesn’t excavate for the parking garage and then build up from there. The link supplied by rolling stone has lots of interesting info.


39 posted on 04/17/2014 12:03:35 AM PDT by gleeaikin
[ Post Reply | Private Reply | To 36 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson