In recent years, housing development has ballooned in China as its economy has developed. Since 1978, the government has promoted the commercialization of housing in urban areas. [1] Property development has become big business in China, with new cities and suburbs springing up with new apartments. [2]
During the early 1980s, both central and local governments began to gradually explore the marketization of real estate assets in China. The first legal land sale took place in 1986 in Shenzhen, one of the pioneering Special Economic Zones in China's reform. Shanghai adopted this approach soon after, leasing its first land to a Japanese firm in 1988, which initiated land transactions. This move towards treating land as a commodity was key in the emergence of commercial housing development in China. [3]
As of 2023, China has one of the highest home ownership rates in the world, with 90% of urban households owning their homes. [4] : 170
China's former under-occupied developments (sometimes referred to as "ghost cities") have had an under-reported degree of success in filling up. According to Wade Shepherd, after the ghost cities becomes a thriving city, they no longer become a much talked about topic in the western media. Ex-ghost cities are rarely news compared to when they were ghost cities. [5] Wade says, "It generally takes at least a decade for China’s new urban developments to start breaking the inertia of stagnation. But once they do, they tend to keep growing, eventually blending in with the broader urban landscape and losing their “ghost city” label." [6]
This issue of cost of housing in China, was not applicable to the housing market pre-1978 in China. Before the 1970s, the construction of housing in China was sacrificed for the development of industries and industrial growth. The construction of the housing industry only received a small portion of state-allocated funds to continue to develop the industry. Low rents for urban housing were enticing to many people, causing the available housing to be rented out quickly, giving the state little money for the precious space they are renting out. This led to a shortage of housing and a shortage of funds to build more housing. [7]
Between the years of 1995 and 2015, the total investment allocated to the housing industry from the Chinese government has increased from a cap of 50,000 yuan to a cut-off point of 5 million yuan, showing a renewed interest in housing development in recent years from the Chinese government after years of limited funding towards the urban housing projects. [8] The Chinese government announced in March 2011 the objective of building 36 million units of housing by 2015. [9] In September 2011 alone, work commenced on 1.2 million units across China; a 70% increase in the construction of social housing compared with 2010 construction. [9] By 2014, Chinese builders have added 100 billion square feet of housing space in China, equating to 74 square feet per person. Construction of urban housing was a major undertaking. The country has shown a major shift in allocating funds and resources to housing their people, building over 5.5 million apartments between the years of 2003 and 2014 in China's cities. These construction projects assigned by the state influence the construction job market in China as well. In 2014 alone, 29 million people were employed in urban construction businesses around China. [10]
The 2011 estimates by property analysts state that there are some 89 million empty properties and apartments in China, and that housing development in China is massively oversupplied and overvalued, and is a bubble waiting to burst with serious consequences in the future. [11] The BBC cites Ordos in Inner Mongolia as the largest ghost town in China, full of empty shopping malls and apartment complexes. [12] However, there have later been contradictions to this property bubble theory as for example, CNN in 2015 also cites The New South China Mall in Dongguan, the biggest shopping mall in the world, was virtually empty for over a decade and that its owners were determined to make the mall full occupancy again. In 2018 after renovations, the mall is reported almost at full occupancy and no longer a "ghost mall". Indicating that the theoretical reasons of a property bubble making it a ghost mall in 2015, may not have even been the determining factor given the only changes were renovations to bring in mass tenants. [13] [14]
Though a large, and largely uninhabited urban real estate development has been constructed 25 km from Dongsheng District in the Kangbashi New Area. Intended to house a million people, it remains largely uninhabited. [15] [16] Intended to have 300,000 residents by 2010, government figures stated it had 28,000 residents by this time. [17] However, in 2017, the ghost city label is less valid to hang on Ordos Kangbashi. According to a report in 2017, the population has increased to 153,000 people living there, 4,750 businesses are now in operation, and housing prices have risen roughly 50% on average from the end of 2015. Of the 40,000 apartments that had been built in the new district since 2004, only 500 are still on the market. [18]
Critics argue that the national social-housing programme disproportionally benefits the urban population and that not only can many of the rural poor ill afford new housing in the cities, but they also find it difficult to obtain household-registration certificates (hukou). [9] The housing development schemes is also affecting the concentration of unemployment as once housing development are completed, workers may be laid off. [19] According to the former Director of China's Housing & Real Estate Administration Bureau, Professor Lin, as of 2008, Beijing had an average of 1.41 individuals per room across the city. [20]
China's housing prices are closely related to the high capital returns and resource reallocation. China's housing prices have been growing nearly twice as fast as national income over the past decade, despite a high vacancy rate and a high rate of return to capital. The bubble arises because high capital returns driven by resource reallocation are not sustainable in the long run. Rational expectations of a strong future demand for alternative stores of value can thus induce currently productive agents to speculate in the housing market. [21]
Public housing, also known as social housing, refers to affordable housing provided in buildings that are usually owned and managed by local government, central government, nonprofit organizations or a combination thereof. The details, terminology, definitions of poverty, and other criteria for allocation may vary within different contexts, but the right to rent such a home is generally rationed through some form of means-testing or through administrative measures of housing needs. One can regard social housing as a potential remedy for housing inequality. Within the OECD, social housing represents an average of 7% of national housing stock (2020), ranging from ~34% in the Netherlands to less than 1% in Colombia.
Urban renewal is a program of land redevelopment often used to address urban decay in cities. Urban renewal involves the clearing out of blighted areas in inner cities in favour of new housing, businesses, and other developments.
A real-estate bubble or property bubble is a type of economic bubble that occurs periodically in local or global real estate markets, and it typically follows a land boom or reduce interest rates. A land boom is a rapid increase in the market price of real property such as housing until they reach unsustainable levels and then declines. This period, during the run-up to the crash, is also known as froth. The questions of whether real estate bubbles can be identified and prevented, and whether they have broader macroeconomic significance, are answered differently by schools of economic thought, as detailed below.
Ordos, also known as Ih Ju, is one of the twelve major subdivisions of Inner Mongolia, China. It lies within the Ordos Plateau of the Yellow River. Although mainly rural, Ordos is administered as a prefecture-level city. Its population was 2,153,638 as of the 2020 census, and its built-up area made up of Ejin Horo Banner and Kangbashi District was home to 366,779 inhabitants, as Dongsheng District is not a conurbation yet.
David Lichtenstein is an American billionaire, entrepreneur, and real estate investor. He is the founder and CEO of The Lightstone Group, which he founded in 1988.
The Spanish property bubble is the collapsed overshooting part of a long-term price increase of Spanish real estate prices. This long-term price increase has happened in various stages from 1985 up to 2008. The housing bubble can be clearly divided in three periods: 1985–1991, in which the price nearly tripled; 1992–1996, in which the price remained somewhat stable; and 1996–2008, in which prices grew astonishingly again. The 2008–2014 Spanish real estate crisis caused prices to fall. In 2013, Raj Badiani, an economist at IHS Global Insight in London, estimated that the value of residential real estate has dropped more than 30 percent since 2007 and that house prices would fall at least 50 percent from the peak by 2015. Alcidi and Gros note; “If construction were to continue at the still relatively high rate of today, the process of absorption of the bubble would take more than 30 years”.
The construction industry of Iran is divided into two main sections. The first is government infrastructure projects, which are central for the cement industry. The second is the housing industry. In recent years, the construction industry has been thriving due to an increase in national and international investment to the extent that it is now the largest in the Middle East region. The Central Bank of Iran indicate that 70 percent of the Iranians own homes, with huge amounts of idle money entering the housing market. Iran has three shopping malls among the largest shopping malls in the world. Iran Mall is the largest shopping mall in the world, located in Tehran. The annual turnover in the construction industry amounts to US$38.4 billion. The real estate sector contributed to 5% of GDP in 2008. Statistics from March 2004 to March 2005 put the number of total Iranian households at 15.1 million and the total number of dwelling units at 13.5 million, signifying a demand for at least 5.1 million dwelling units. Every year there is a need for 750,000 additional units as young couples embark on married life. At present, 2000 units are being built every day although this needs to increase to 2740 units. Iran's construction market will expand to $154.4 billion in 2016 from $88.7 billion in 2013.
South China Mall in Dongguan, China is the fifth largest shopping mall in the world in both gross leasable area and total area.
The Australian property market comprises the trade of land and its permanent fixtures located within Australia. The average Australian property price grew 0.5% per year from 1890 to 1990 after inflation, however rose from 1990 to 2017 at a faster rate. House prices in Australia receive considerable attention from the media and the Reserve Bank and some commentators have argued that there is an Australian property bubble.
Housing in India varies from palaces of erstwhile maharajas, to modern apartment buildings in big cities, to tiny huts in far-flung villages. The Human Rights Measurement Initiative finds that India is doing 60.9% of what should be possible at its level of income for the right to housing.
The 2005 Chinese property bubble was a real estate bubble in residential and commercial real estate in China. The New York Times reported that the bubble started to deflate in 2011, while observing increased complaints that members of the middle class were unable to afford homes in large cities. The deflation of the property bubble is seen as one of the primary causes for China's declining economic growth in 2013.
Real estate in China is developed and managed by public, private, and state-owned red chip enterprises.
A ghost estate is an unoccupied housing estate, particularly one built in the Republic of Ireland during the period of economic growth when the Irish economy was known as the Celtic Tiger. A massive surplus of housing, combined with the late-2000s recession, resulted in a large number of estates being abandoned, unoccupied or uncompleted. The National Institute for Regional and Spatial Analysis defines a ghost estate as developments of "ten or more houses where 50% of the properties are either vacant or under-construction", which therefore does not fully cover the total number of unfinished estates.
Kangbashi District is an urban district of the prefecture-level city of Ordos in Inner Mongolia, China.
Swire Properties Limited is a property developer, owner and operator of mixed-use, principally commercial properties in Hong Kong and Mainland China. Founded and headquartered in Hong Kong in 1972, Swire Properties is a property developer in Hong Kong, and is listed on the Stock Exchange of Hong Kong. Including subsidiaries, it employs around 4,500 people. The company is, in turn, a subsidiary of the publicly-listed Swire Pacific Limited.
A holdout is a property that did not become part of a larger real estate development, usually because the owner refused to sell their property. There are many examples of holdouts worldwide.
Since the British colonisation of Hong Kong in 1841 after the First Opium War, Hong Kong has grown from a stony outcrop on the southern coast of China to a territory whose property prices are among the highest in the world. The territory has a land mass of 1,111 km2 (429 sq mi). According to government figures as at 2018, most of the land in Hong Kong is woodland, shrubland and grassland – much of which designated as country parks such as Lion Rock, Plover Cove Country Park and Sai Kung East Country Park, and only approximately 25% of the land mass out of the total territory is classed as "built-up". Most of the 7.3 million people in Hong Kong inhabit an area measuring 78 km2 (30 sq mi). Excluding rural settlement housing, which represents 7% of the city's total domestic households, the remainder of the population is effectively squeezed into an area of 42 km2 (16 sq mi). Property developers play a direct role in housing in Hong Kong, including the hoarding of approximately 1,000 hectares of agricultural land which could otherwise be used for housing.
Under-occupied developments in China are mostly-unoccupied newly-built property developments in China, and frequently referred to as "ghost cities" or ghost towns. The phenomenon was claimed and recorded as early as 2009 by Al Jazeera's Melissa Chan and subsequently reported by news media over the decades. Although a feature of discourse on the Chinese economy and urbanization in China in the 2010s, many developments that were initially criticized as "ghost cities" in China have since become occupied and are now functioning cities.
The Republic of Panama's real estate industry relies on foreign investment. The sector has grown since 2006, as such investment has helped to fuel Panama's economy and housing market.
Altan Xire is a town in and the county seat of Ejin Horo Banner, Inner Mongolia. Although administratively the chief town of a rural county, Altan Xire is highly urbanized with a skyscraper-filled central business district worthy of a large metropolis.
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