What is worse than a City full of people? , A city without people at all… Decoding China Real Estate Market.
Prueba en español!!!!
The visible consequence of a low or inexistent demand produces deserted cities just like the one reported by our colleague in Beijing Xin Zhou on this story {NSN N7TMGD6S972R<Go>}. This deserted replicas of Manhattan, London or Paris, also represent a sunken investment that slowly eats up the Developers’ return, pushing it to negative leverage territory where debt service eats away any upside potential.
This should be a reason for concern not only for Chinese policy makers but to the global community given the impact that a flop of the real estate market in China can cause in the global financial system. But just how close is this sector to free fall? First of all we have to consider that this is not something new as we can attest by this piece published in 2010 {NSN NMK0A36K50YB<Go>} so the effects of this deserted cities have now permeated to other indicators and instruments inside the financial markets. This influence can provide some light to the situation considering the difficulties to obtain reliable macro-economic data for China.
China Real State trends
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