House Prices Plunge in Chinese Ghost Town

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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."

The restrictive monetary stance of China's central bank, designed to reign in unsustainably high price growth, is biting. Developers in many new compounds are slashing their prices to find buyers.

But of greater concern is that the real estate market contributes 10 percent to Chinese growth and affects a chain of related industries. A property bust could drag the rest of the economy into a sharp recession.

Category:

News & Politics

Tags:

• ntdtv
• ntd
• china news
• real estate
• properties
• house prices
• ghost town
• china
• chinese
• economy
• inner mongolia
• bust
• recession

[KickDownDoors]

China intentionally overbuilt in the SOVEREIGN NATION of MONGOLIA to push their Chinese people into taking over the country with overwhelming numbers. The Chinese people hate the Mongolian climate, have no family near by, no cultural identity and NO FREAKING JOBS... so why move there? This is what Europe and Obama have been planning for the rest of us. Government run industry and central planning. You will live, eat, work where we tell you.

[Nymphe14]

Let the Japanese move in...

[iamxieqi]

@KickDownDoors can you be more ignorant? this is inner mongolia,an autonomic region of china,it has no shit with mongolia,which once was a part of china and went independence with the intervetion of soviet.

[spellbinderart]

The earth's population is getting so large that humans can no longer manage these huge economies. Humans need to just let go and let computers manage this stuff. it's the only way.

[Petirep]

@KickDownDoors So if the government knows that overbuilding will lead to collapse then why are they doing it in their own country? I'm not doubting you, I'm just trying to understand the actions of the Chinese government. Why would they want to collapse their own economy? Who in the government benefits?

[rice1ninja]

0:54 I FOUND WALLY XD

[Hpyrr328]

@scott93257 haha i know right? whenever someone ticks you off use the finger gun xD

[scott93257]

@Hpyrr328

Yeah that part was great too....I also liked the way the film was made...Sort of like a documentary thing...All in all that movie was awesome... Flying like that would be totally awesome..I've always wondered what it would be like to fly like that...I mean I have had dreams of flying around rooms and just running a little bit and taking off but to actually experience it would be phenomenal... :) But yeah...Mormons..LMAO that part was great.

[Hpyrr328]

@scott93257

LOL! I liked the part when after the guy moves the car he said "Don't mind us we're just Mormons" and I was literally LMAO xD It's also cool that the whole movie was like a video cam record and there was no background music at all :D

[scott93257]

@Hpyrr328

It was pretty cool wasn't it? One of my fav parts is the flying teddy bear scaring the shit outta that kid LMAO

[We4get1918]

@KickDownDoors Dumbass, they didn't build in mongolia, they built in a region of china that happens to be called "inner mongolia." They intentionally overbuilt it to encourage economic development in a very rural and underdeveloped region (it borders the SOVEREIGN NATION of MONGOLIA (and its 500,000 people) & Siberia). Even if they had done whatever the hell you believed, the slippery slope argument you draw from that makes too little sense to even attempt to refute in my remaining 17 characters