Chinese Construction Continues
No doubt about it. The Chinese Housing Bubble has produced a ridiculous amount of structures here in China.
Drive to any reasonably large city and the high rise buildings are still going up.
Chinese Housing Markets like Shanghai and Beijing are seeing sizable downtrends in Price, except for this past month, yet in places like Qingdao, Yantai and even tiny Zhaoyuan [Pop. 500,000] has buildings in various states of progress.
Even with the existing construction, the pace has slowed. However, another trend seems to be taking place, perhaps a shift in the economy and labour force.
From conversations around Zhaoyuan, most, if not all, units have already been purchased, but sit vacant. Residential Property owners, here, believe the property will lose value if a tenant inhabits the unit. Only a small percentage are rented out.
A new trend is emerging?
At the base of most new buildings, mounds of debris can be found. Huge piles of brick, cement and more. Indications are, owners have commenced renovations of their purchased units.
Buying a unit, will earn a pretty spartan arrangement and perhaps not the best layout or finishings. Based on first hand observation, many units most likely need to have the guts replaced (plumbing and electrical). While the Chinese are masters at mass production at high rates of speed, they are certainly not competent at good finish work.
In some cases buyers have purchased or “acquired” multiple units (it is not unheard of for a local government official to have been gifted a home or two.) located side by side. So naturally, these units end up combined into a large master unit.
Interesting Note: China does not have a property tax system, so the property can be registered to whomever. Right now, if you happen to be an “official” who gets paid in Homes, for favours, they can be hidden in plain sight. Maybe even the family dog is an home owner.
While the trade persons of mass construction are long gone and off to the next job, what you are seeing is the arrival of other trades relevant to home renovations. From the men and women hauling chunks of cement down the elevators, the lady filling bags of sand for cement mixing, to the folks involved in the finish work, a labour force is still hard earning a living.
And of course with so many people, in and out of the complex, the obvious next progression is for someone to capitalize on this new customer base.
What was once a complex full of empty units is now seeing growing traffic from:
– A new kindergarten
– Trades and labour for renovation work
– Hardware Stores setting up small outlets to supply materials and fixtures for upgrades.
– And. of course, more owners moving in.
The commercial space, practically completely vacant, 2-3 months ago, is now stocked with 2 convenience stores and a myriad of other businesses.
glass of scotch