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Bursting real estate bubbles: China, Spain...Vancouver?

What would happen in Vancouver if China's real-estate bubble were to burst?  Would Vancouver's bubble burst and would we ever see a squatter's movement like that in Spain? (Image below by vikkies)

Abandoned storefront, China. Photo: vikkies (CC license via Flickr; see link above)

China, Spain, Vancouver

China and Spain have both seen ambitious increases in luxury housing developments. Both are now seeing those developments stand empty. What does this mean for Vancouver, currently experiencing a similar boom? Let's find out. First stop: China.

This town is comin' like a ghost town

China underwent the largest building boom in history, and now faces an equally large bubble-burst. The boom itself was driven by a rapacious development industry and heavy curbs on how China's middle class can invest its newfound disposable income.

The video below explores the fallout from this boom: entire towns empty or nearly so, with fictional fast-food franchises and fictional neighbors enticing you to buy. Imagine the MAC scandal on an industrial scale.

So, how many empty apartments are there in China? It's impossible to know for sure, since, should such information even be accurately collectible, no official in his or her right mind would ever make it public. Still, the media seems to be running with 64.5 million empty apartments in China, based on electric meters that read zero.

That's a big number, and quite possibly overblown: inaccurate counts, broken or hacked meters, and straight-up sensationalism could also be factors here. Even if the real number is a tenth of that, we're seeing a huge waste of resources and space.

China's vacancy rate could be as high as 30%, but that statistic (which sounds a bit overblown) is difficult to nail down: nobody seems to be discerning between vacant properties and those which have been purchased but stand unoccupied.

Unsurprisingly, the heavy demand is at the lower end of the pricing scale: everybody wants the affordable housing, while luxury units languish.

Sure, there are millions of vacant units in China; just not too many that the average person can afford.

Add to that a proposed tax on home sales, and you get terrible news for the Chinese economy, which is so heavily driven by construction.

China also boasts the world's largest shopping mall, at least in terms of sheer size: the New South China Mall is virtually empty.

The "dead mall" is in Dongguan, so perhaps location-- or, more to the point, income disparity-- is a root cause of both the ghost apartments and the ghost mall:

Dongguan is a factory town and most of its almost 10 million inhabitants are migrant workers struggling to make ends meet. “People coming here to work in factories don’t have the time or the money for shopping or the rollercoaster,” said a migrant worker in his 20s, surnamed Xiao, who works at the mall.

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