Wednesday, December 14, 2011
When estate markets stagnate or start declining ... that's usually the first sign that a country's economy will follow suit.
The long-predicted crash has arrived with a vengeance in China's original ghost city.
Home prices have plunged by one third recently, down 60% from 2006, in Kangbashi, the ambitious second city built on the outskirts of Ordos. Developers, investors and migrant workers are all giving up on Kangbashi.
"Ordos is the first of a number of these ghost cities that will see similar magnitude price declines," says Gillem Tulloch of Asianomics.
The bigger issue, however, will be if declines reach the major cities. "The degree of price declines you are seeing in Kangbashi give a preview of what you will see in major cities. I would expect price declines of 20% nationwide over the next 1-2 years," Tulloch said........