Another Look at China Real Estate

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Usually at we bring to you and comment on the latest articles and trends. However, sometimes we find an older article that might shed light on the present and near-future.

Previously we presented: China’s Real-Estate Frenzy

Today is one of those times where we found an article from August 3, 2010 in Der Spiegel Online International on the the China Greed-O-Rama happening in real estate:

Megalomania is in full swing in China’s booming economy. “The World Is Yours” is the slogan the developers are using to advertise the luxury project. Qi points to model villas in an exclusive waterfront location. These properties won’t be sold until the end, he says, winking conspiratorially. Since sales began, square-meter prices have already risen by 4,000 to 5,000 yuan (€450-€570 or $590-$740). The investors expect their handsome profits to increase with each new construction phase.

Calculated optimism forms the fragile base on which similar projects are thriving all across China. Doubts are taboo, especially now that the mood is beginning to shift, at least outside the flashy showrooms. There is more and more talk of the bubble bursting soon, with some saying that the tipping point has already been reached — with uncertain consequences for the rest of the global economy.

When a feeling of invincibilitiy has given way to secret silent negative comments, then it is a good time to look for the exits.

A picture of complete decadence is painted by the journalist Wieland Wagner:

An interminable sawing, screeching, drilling and hammering rips through the oppressive summer heat and humidity in the northern Chinese city of Tianjin. Here, on the city’s dusty outskirts, hundreds of new apartment buildings and houses in every imaginable style are springing up.

In an air-conditioned showroom, salespeople in yellow uniforms take potential buyers on tours of the facility. “In one year, we already sold 90 percent of North America, Asia and Europe,” customer consultant Qi Yunbu says proudly. “Now we’re preparing Africa, Oceania and South America for sale.”

“Xingyao Wuzhou,” loosely translated as “Shining Star over Five Continents,” is the name of this Chinese blend of Dubai and Disneyland, a €2.3 billion ($3 billion) development designed to imitate the world map. The gigantic residential and leisure complex is being built around and within an artificial lake.

The developers apparently want to make sure that the residents of this aquatic paradise will lack for nothing. The plans include the world’s largest indoor ski center, golf courses, a seven-star hotel, the world’s largest musical fountain and miniature replicas of famous structures like the Tower Bridge in London and San Francisco’s Golden Gate Bridge.

It might be a very prescient of Mr. Wagner to reference Dubai in his article. This picture of China is one of Dubai-on-steroids.


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