House Prices Plunge in Chinese Ghost Town
NTDTelevision
2011-12-06
Views 1
For more news visit ☛ http://english.ntdtv.com
Follow us on Twitter ☛ http://twitter.com/NTDTelevision
Add us on Facebook ☛ http://me.lt/9P8MUn
The city of Ordos in Inner Mongolia has gained notoriety as a modern day ghost town. Blocks of homes and shops have remained empty for years. Falling prices demonstrate what can go wrong in a property boom that loses sight of real demand.
There is a sense of inevitability about the crash of real estate prices in Ordos. That city is widely known as China's ghost town—for its brand new, empty office buildings, shopping plazas and apartments.
The city in the steppes of Inner Mongolia borrowed the equivalent of 180 million US dollars from banks in 2004 to build a new district, Kangbashi. It includes a 79 million dollar museum.
But while 1.4 million people live in greater Ordos, including the old part of town, less than 50,000 live in the new district, a government official told Reuters.
For a time the cranes kept building more homes in Kangbashi, despite blocks of towering new apartments sitting empty and highways that were silent during rush hour. But now even the cranes have stopped, and workers have no employment during winter.
[Yang Zhouluo, Local Resident]:
"The locals all loaned their money and all money has been invested in property. Now no one can sell apartments, and the money is gone."
Migrant workers are fleeing the old part of the city, Dongsheng, where people actually live. And that's caused home prices to fall by almost a third. But since October, prices in other parts of China have been falling as well, including in Beijing and Shanghai. Private surveys showed that home prices nationwide have fallen for three consecutive months.
[Hui Jianqiang, Head of Research, E-House China]:
"In places such as Wenzhou and Beihai, government control as well as the market price's drop and adjustments, are also very obvious. But they're not as extreme as in Ordos."
Follow us on Twitter ☛ http://twitter.com/NTDTelevision
Add us on Facebook ☛ http://me.lt/9P8MUn
The city of Ordos in Inner Mongolia has gained notoriety as a modern day ghost town. Blocks of homes and shops have remained empty for years. Falling prices demonstrate what can go wrong in a property boom that loses sight of real demand.
There is a sense of inevitability about the crash of real estate prices in Ordos. That city is widely known as China's ghost town—for its brand new, empty office buildings, shopping plazas and apartments.
The city in the steppes of Inner Mongolia borrowed the equivalent of 180 million US dollars from banks in 2004 to build a new district, Kangbashi. It includes a 79 million dollar museum.
But while 1.4 million people live in greater Ordos, including the old part of town, less than 50,000 live in the new district, a government official told Reuters.
For a time the cranes kept building more homes in Kangbashi, despite blocks of towering new apartments sitting empty and highways that were silent during rush hour. But now even the cranes have stopped, and workers have no employment during winter.
[Yang Zhouluo, Local Resident]:
"The locals all loaned their money and all money has been invested in property. Now no one can sell apartments, and the money is gone."
Migrant workers are fleeing the old part of the city, Dongsheng, where people actually live. And that's caused home prices to fall by almost a third. But since October, prices in other parts of China have been falling as well, including in Beijing and Shanghai. Private surveys showed that home prices nationwide have fallen for three consecutive months.
[Hui Jianqiang, Head of Research, E-House China]:
"In places such as Wenzhou and Beihai, government control as well as the market price's drop and adjustments, are also very obvious. But they're not as extreme as in Ordos."
Report form
RELATED VIDEOS
