Ripple effect

Should China's real-estate bubble actually burst, what effect would it have on our market? Obviously a local price collapse would make overseas investment less attractive. One Vancouver broker with whom I spoke said, "Obviously, the outcome would be detrimental" to housing values here in the Lower Mainland.

Of course, such a collapse would reach beyond just housing prices in our corner of the world: stoppage of housing development in China would in turn affect traffic in raw materials, the hiring of labour, and beyond; well past the scope of this article.

China would surely do everything in its power to prevent such a collapse from happening; it's only a matter of how bad Beijing considers "bad" to be. The point is that the bubble bursting is not unthinkable.

Ghost town blues in Spain

Ghost towns are springing up in Europe, too. Spain is seeing entire developments stand unsold. The New Yorker's February 25th issue features "The Hangover", a piece by Nick Paumgarten exploring the abandoned luxury developments throughout Spain. Notable among them: Residencial Francisco Hernando in Seseña.

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Francisco Hernando himself is a sort of Spanish Donald Trump, but with far more humble beginnings. Hernando rose from abject poverty to dizzying heights: he was the guy who unclogged drains as a teenager, but he then went on to amass a fortune worth over $2 billion and give the King of Spain a case of yacht envy.

However, the launch of Hernando's eponymous development 2007 served as an object lesson in real-estate economics: "If you build it, they will come" may work for baseball fields, but not for luxury property developments.

To be sure, it wasn't a good sign when these apartment buildings were launched with celebrations featuring fake caviar on cheap supermarket bread. Indeed, the developers seemed to be unconsciously commenting on the economic climate of their country. Simon Norfolk's photos show the massive gap between aspiration and reality in Spain. Hauntingly beautiful for the viewer, just plain haunting for the developer.

“Everyone wanted this boom and prosperity to go on forever,” Norfolk said. “Everyone wanted to get rich doing nothing.”

Squatter's paradise

In Spain, don't equate "unsold" with "empty".