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Comment by xyzzy21 | Hacker News Reader

Because of "chà bu duō" and " dòufuzhā gōngchéng" buildings (I know, redundant), it's NOT really an asset in the normal sense.

https://chinese.yabla.com/chinese-english-pinyin-dictionary....

https://www.sourcingallies.com/blog/cha-bu-duo

https://en.wikipedia.org/wiki/Tofu-dreg_project

https://www.youtube.com/watch?v=s-2DtL-Wjkc

The presumption that you can compare US financial/economic norms to Chinese is Epic Fail as an assumption. You have to take your head out of the clouds and challenge you ideals assumptions that underlie your understanding of the world!

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I can post videos of decaying buildings in the USA too - not really super relevant.

The fact is that China is urbanizing at an unprecedented rate. You don't really have to believe the government - just go visit basically anywhere in China.

The buildings in question are new though, not old decaying buildings. They are just very shoddy constructed with corner cutting everywhere. How prevalent? It’s hard to say. Guess we will find out in a few decades.

New buildings can be decaying liabilities just as much as old ones. More so if they have been constructed badly.

The point you’re missing is many of those home were bought as investments. No property tax makes them good stores of wealth, no carrying costs and my god a less risky investment than Chinese company equities.

Problem is that despite the urbanization potential that doesn’t mean the properties are correctly priced or that they’ll continue to go up.

I spent some time in another Asian country that has a per capita GDP 1/10th of the US, yet housing prices are comparable to the mid-west US and most are empty. Most are owned by the ultra rich and used to launder money. And I’m not talking prime location, these are basic apartments on the edge of the city going for $100,000USD or 30-40x average annual salaries. Unless GDP goes 3x no way those prices will hold.

It’s a massive bet on continued income growth and demand for real estate which is not a given, which Japan showed with its massive property bubble.

That's the poor people's speculation.

Real money just buys western passport (for themselves of their children via birth tourism) and buy real estate on the North-American west coast.

Most of the apartments I lived in in china have been absolute garbage. In shenzhen - most were probably not more than 10 years old. I even had to go the hospital once because my hand went through the glass of the bathroom door, when I tried to push it open.

Meanwhile my current home outside china is almost 100 years old and not garbage.

Lots of videos of the new apartments in China where the walls crumble or are hollow. I remember reading that developers get huge subsidies from the government to build these buildings and either cut corners to pocket the money or never complete the buildings. I donno if that’s true or not. But seeing the tofu houses is makes me feel like it’s true.

There is a special name for this tofu-dreg projects

https://en.m.wikipedia.org/wiki/Tofu-dreg_project

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