China’s ‘ghost cities’ – third- and fourth-tiered cities built which are left mostly vacant – have been a problem for a long time. In addition, there are tens of millions of sold units which are left vacant as well. These ‘ghost apartments’ are usually bought by entrepreneurs who have no intention of living in them or renting them out. Others buy them as holiday home or as gifts to future brides. Mostly buy in hopes of selling it off at a profit.
As land in China is controlled by the government, speculators expect the property prices to increase, and so they buy multiple properties. Such practices lead to soaring prices of property and rental, leaving younger first-time homeowners less able to afford them. In light of this issue, the government had to introduce measures to curb housing prices in 2017. President Xi Jinping also stepped in to say that “houses are built to be inhabited, not for speculation”.
Read the full article on City Lab: China’s Huge Number of Vacant Apartments Is Causing a Problem
Analysis:
The idea of ‘ghost apartments’ may seem analogous to ‘ghost cities’ at first, but there are differences.
Ghost cities may not be a long-term issue if framed in another perspective. It is still unclear whether it is a positive or negative phenomenon. To some, it shows a lack of planning and waste of money to build things that people are not moving into. To others, the existence of vacant buildings is a phase between construction and inhabitability. It would take time before the built areas attract people through opportunities to make a living. Some view it as a different model of urbanisation, where the oversupply of urban land allows for people to move in and spread out land density, different from the usual way other cities grow – where the population grows faster than the land would allow for.
However, ghost apartments seem to be a different issue as it drives housing prices upwards. The government has to balance between allowing market forces to work, or ensuring affordability of housing for the population, especially for younger homeowners, with other ramifications such as their ability to start families without their own homes.
Questions for further personal evaluation:
- To what extent do you think vacant apartments is a problem?
- What are other challenges will vacant buildings and ghost cities bring?
Useful vocabulary:
- ‘speculate’: invest in stocks, property, or other ventures in the hope of gain but with the risk of loss
Picture credits:https://unsplash.com/photos/i0ZiGj_2DWM