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- Aug 30, 2007
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An interesting 24 page article on boom and bust cycles in the US, China and other countries is here. Since Vancouver's (and to a degree, Toronto's) real estate market is so tightly coupled with the Chinese investors coming there it makes for an interesting read:
http://www.scribd.com/doc/65109981/GMO-White-Paper-Edward-Chancellor
It concludes with this:
A giant smog of unreality hangs over Chinese property. SocGen calculates that over the last decade, China has completed 16 billion square meters of floor space. This is equivalent to building Rome every two weeks. This construction boom has resulted in vast `ghost cities` across China, from Ordos in Inner Mongolia, with its reported 1 million empty apartments, to Zhengzhou in Henan province. The latter development ` comprising two financial centers, 13 hotels, 15 universities and 9 malls ` is said to be nearly four times the size of Ordos. A recent visitor noted little evidence of activity beyond (shoddy) construction.
Harriet Martineau observed the absurdity that accompanied Chicago`s real estate boom in the mid-1830s and wondered only that it had lasted so long. Today, China`s property market provokes similar thoughts. Real estate cycles peak at the point when credulity gives way to disbelief. China`s does not seem far from that point.
Would love to hear from some folks with local insight !!
http://www.scribd.com/doc/65109981/GMO-White-Paper-Edward-Chancellor
It concludes with this:
A giant smog of unreality hangs over Chinese property. SocGen calculates that over the last decade, China has completed 16 billion square meters of floor space. This is equivalent to building Rome every two weeks. This construction boom has resulted in vast `ghost cities` across China, from Ordos in Inner Mongolia, with its reported 1 million empty apartments, to Zhengzhou in Henan province. The latter development ` comprising two financial centers, 13 hotels, 15 universities and 9 malls ` is said to be nearly four times the size of Ordos. A recent visitor noted little evidence of activity beyond (shoddy) construction.
Harriet Martineau observed the absurdity that accompanied Chicago`s real estate boom in the mid-1830s and wondered only that it had lasted so long. Today, China`s property market provokes similar thoughts. Real estate cycles peak at the point when credulity gives way to disbelief. China`s does not seem far from that point.
Would love to hear from some folks with local insight !!
