Saturday, January 10, 2015

Ridiculous China Building Bubble


"Now, after more than one and a half decades of real estate investment manias, China has built some 700 five star hotels with another 500 under construction, and 470 skyscrapers, with another 332 under construction. Five of the ten tallest skyscrapers under construction in the world are located in China. As a country with per capita income of US$6700, China’s home ownership has surpassed 80 per cent, dwarfing America’s 65 per cent and Germany’s 40 per cent. China’s floor space per person is about 30 square metres. In contrast, Hong Kong’s floor space for the median family is less than 48 square metres, while the average income in Hong Kong is more than US$52,000, more than eight times higher than that in the Mainland."
Good luck finding a market for your iron ore, coal, steel, concrete now.


Luke The Debtor said...

Top 10 tallest skyscrapers completing in 2015

Anonymous said...

I think there's too much construction at the high and low ends of the residential market in most tier 1, 2, and 3 cities in China. The largest -- and most over-leveraged -- developers have an inventory full of multi-bedroom units that won't clear out anytime soon due to the growing supply of units above 150 thousand RMB; these companies make good short candidates (due to their working capital constraints). However, there are also developers who focus on making 1 or 2 bedroom units for first time, middle class home buyers at prices between 80 to 120 RMB that are under leveraged, cheap and will do very well in the long term.