so, there's been some talk about a massive china real estate bubble. scary stuff on the global scale, especially for us (mostly) unemployed architects who are still sucking on the proverbial chinese teat.
why, just yesterday, james chanos gave the following prediction about the china real estate market. this is a dude who foresaw the enron debacle.
From his MSNBC interview:
"We are not calling for an impending crash of China or of the Shanghai stock market, but in particular the bubble that has been blown up in real estate both commercial and residential as well as other forms of fixed asset investment in china is unprecedented," Chanos said.
"I do see all of the signs of a credit induced real estate bubble that i think is going to be a doozy," he added.
He said there are about 30 billion square feet of space in construction only in the commercial property sector.
I think its important to put this in context, and that context casts real doubt on Chanos' conclusions. Chanos appears to be in the real minority among bigshot investors and financiers. The feeling among other experts seems to be that he is incorrectly using analytical techniques used correctly to evaluate corporations (Enron) to the political economy of an entire country - which is wrong.
So no need to panic. If y'all want to go make 50% of your US salaries by moving to China and working for Chinese architects for Renminbi, you will continue to have ample opportunities to do so.
Lol... "So I asked several Taiwanese businessmen whether they would “short” China. They vigorously shook their heads no as if I’d asked if they’d go one on one with LeBron James."
I think it's worth pointing out that many seem to suspect that Chanos' diatribe really has less to do with China but with our own country's domestic politics - something that Chanos has done repeatedly in other editorial pieces and statements in which China wasn't mentioned. Chanos knows nothing about China and cares even less about it. Instead, the suspicion is that he is really trying to grind a domestic, American political axe against Obama's stimulus activities and in favor of Republican trickle-down theory. In short, Chanos is using "China" when he is really saying "America," in order to bash the Keynesian he thinks that the current administration is embracing. By attacking the Chinese stimulus as "bubble-creating" he is really complaining about Dems in America.
Needless to say, as a Dem, I call bullshite. Who knows what's going to happen in China, but I don't think this has anything to do with China. It's really about teabagging.
urb... i agree with the points made about the chanos agenda. that said, i think that this is an interesting rebuttal by a NYT reader, in response to the friedman article:
"Friedman's trumped-up debate with Chanos is meaningless without specification of a time horizon. Friedman is obviously talking long-term, and I don't think Chanos has said China will permanently collapse like Enron. But the stock market could easily drop 50% in the near-medium term. So Chanos' bet is sound, and Friedman is just pontificating."
i still think that this type of short-term, albeit collapse could create scary global shockwaves that do, indeed, reshape working conditions for architects/designers for years and years.
More seriously though, does anybody know where he gets the 30 billion square feet of commercial office space number from? If that number's real, it is worrisome, but I'm not sure it's correct.
We track some of this stuff in the big picture research we do.. The only number I've seen that comes close to to 30 million is the 29 billion square feet (2.74 billion square meters) in total space under development/construction COMMERCIALLY, which China's National Bureau of Statistics defines as ALL private residential, office and factory development (what it calls "commercial" development). If so, and Chanos does not really have a mysterious data source that nobody else has seen, it is possible that the 30 billion in office development is a mistake (and that it’s really office, industrial AND residential development together, which is a completely different figure).
If that 2.74 billion sq m includes a large proportion of residential development, then it equates to a 7% or so rate of inventory replacement on China's total residential inventory of 310 bllion square feet or so, plus its 90 billion square square feet of existing non-residential inventory (a total of 400 billion square feet).
To give comparable numbers for the US, according to the AIA, there are 250 billion sq feet in total inventory (divided into 170 billion sq ft of residential and 80 billion square feet in non-residential) in the US, of which 11.75 billion sq ft must be replaced each year (either through new construction or substantial renovation). 1/3rd of that is non-residential, 2/3rds is residential.
China has over four times our population, has a lot more catching up to do, has much less existing stock, and a much faster economic growth rate, so 30 billion sq ft total (not office) may not be that unreasonable. But if Chanos is right and it's just office space, I'd be a bit worried (in a health economy, non-residential commercial space is about 1/3rd of total inventory. In that case, their current rate of construction is about twice to three times what it should be, for a health steady state). It all comes down to where Chanos gets that 30 billion from. If it’s from the National Bureau, he has it wrong.. over semantics.
Put another way, if 30 billion sq ft equates to a 5x5 (actually 4x5 by my calcualtion) space for every Chinese person, then our 11.75 billion sq ft in run-rate inventory building stock replacement (per AIA) equates to a 4x8 space for every American person. If he has an issue with that, then there's more than one bubble he should be concerned about.
I am curious how much of that 11.75 billion square feet is architect designed. NCARB says that there are 96,966 architects in the US. That's only 121,000 sq ft per architect per year - roughly one commercial offical building or big box store, one 60 unit apartment block with parking, or one eight story commercial office building. That probably equates to, say, $360,000 or so, in fees for said architect (going off average cosntruction costs) - just enough work for a SINGLE architect (no supporting designers, draftsmen, etc) + office support at standard cost multipliers for one year. That should give one a general idea how tough of a profession architecture is.
China, thus far, is showing no sign of an upcoming economic meltdown.
Although, I work in the Linked Hybrid design by Steven Holl. It is designed as an apartment building, but the majority of the tenants are small offices. I would say that about 95% of the complex is vacant. So I am sure that the developers are not all that happy with Mr. Holl's creation. I think that the bottom line is that China is in its own bubble and the newly wealthy Chinese have absolutely no idea what to do with thier money. They therefore, commission STARchitects to design "eye catching" buildings that end up being failures in the long run. However this does not seem to discourage their investments in the slightest. I think as long as their are people with money that are ready to make bad decisions in China then it will be fine and serve as a gallery for incredibly unsuccessful pieces of architecture that serve as pieces of art in the urban landscape.
China is still going strong... well as strong as possible (It is China you know)
I was skeptical of this Chanos guy until I watched the interview. He makes a compelling argument. The points that stuck out are:
1. Friedman makes the counter argument that China has enough foreign reserves to bail them out of a bubble collapse, but historically, the only other two countries that had this proportion of foreign reserves to GDP was the United states in 1929, and Japan in 1989 before the lost decade. It's exactly the fact that the country is cash-heavy that perpetuates the bubble.
2. The ratio of investment on speculative real estate grossly over-shadows investment on infrastructure and middle class housing. Although China is building a lot of roads, this pales in comparison to the level of real estate flipping from foreign nationals (Dubai much?). China is doing a lot of stuff in a big way, but he argues they are a doing even more bad stuff in a big way. You have to look at it proportionately.
They say China can grow into this boom, but I don't think they can if the middle-class keeps getting pinched, much like the situation here in the US.
Also, maybe someone with more info can confirm but Chanos mentioned that the luxury condos being built (that are fueling the boom) are never more than just the box. They are sold unfinished. And I don't mean furnished but actually as in raw concrete everywhere still?
@namhenderson, that's a common practice in many "developing" countries.
I know that in most ex-USSR countries (Russia, Ukraine, etc.) luxury buildings are usually sold that way.
I would say it is not just a question of economics but personalization.
You can design a 1-bedroom loft while your neighbour above you can build a 4-bedroom baroque-style apartment with the same area and external dimensions.
Tried to watch the Chanos video but was of course unable to because I am in China! hahaha so I can't comment on that but here are a few observations:
I have worked on some multi-family highrises in Beijing but they are new construction with no existing concrete infrastructure. However, there are hundreds and hundreds of concrete skeletons in the sky that are being worked on 24/7. I wouldn't doubt that investors are purchasing apartments in a concrete skeleton before the construction is complete... however I do think that they are purchasing a final product that is to be completely finished, not just a concrete box.
The manner that things are constructed here is unbelievable as well. My boss quite often tells us that we our buildings must have a concept/spatial arrangement that this extremely well thoughtout and articulated, because we can garantee that the construction will be shody to say the least. As I said, I work in an office in a Steven Holl building and I would have loved to have seen Holl's face when he examined the final product. The craftsmanhip and attention to detail is absolutely retchid.... that said I don't think that generally chinese investors care about what the completed project looks like. They seem to only care about the bottom line and bringing money in.
Often we will design an interior apartment layout or exterior elevation and the client will never comment on. As long as a traditional chinese person would accept the living conditions and the elevation is "eye catching" then they don't give a shit. I swear everytime I am told to design something "eye catching" by a client I internally roll my eyes and think about all the stupid shit that they think is eye catching... yes a big silver sphere at every entrance with a diameter of 6 meters would be great (roll my eyes)... they are always just wanting to slap some afterthought on the facade so that it is different. One client even said that he would prefer the facade to be really ugly rather than typical.
anyway I hope that sort of answered the question :)
okay... I was able to FINALLy watch the video... very fascinating! Thanks for posting that it was a great video.
My thoughts... I know he talks about selling concrete cells... I have never seen the common householder buy a shell. Developers would probably do that but I haven't observed that either.
It was interesting to hear that charlie Rose thought the chinese govenment understands what they need to do and that they are interested in alternative sources of energy. Perhaps that is more the case in Southern China, but in Beijing that is most definitely not the case unless it is a foreign architect designing the building. Also the Chinese government really shades all the numbers in their favor. I think China is destin for a economic crisis of their own devise, whether it be in the construction market or otherwise. For instance, pollution is measured by the Air Quality Index.... the AQI in my hometown is 11... the AQI in London is 27... the AQI in Beijing is 217! living in this city is the equivalent of smoking 3 packs of cigerettes a day. (one reason why I want to returnto the US) Cancer is rampant and destruction of the environment is unbelievable. If you venture outside of Beijing into the countryside you will stumble upon "forrests" that are less than 15 years old and all the trees are plnted in straightlines. Environmentally China is playing with fire. 16 out of the most 20 polluted cities in the world are in China! So I most definitely do NOT agree with Rose's statement that the "leadership understands the needs of the future" and is interested in alt energy... NOT THE CASE!
All I can say is that alot the brand new high rises are vacant... I live in a very "western area" a complex of high rises buildings that seem to be doing very well though. It is funny because you can see the process of development if you look at the area that I live in... there is one high-rise development after another that were quite obviously built 3 yearish apart and as they get farther away they get taller and taller and trendier and trendier.
Anyway great video... I can't wait till China gets jolted by all their horrible decisions.
The Boston Bruins are a professional ice hockey team based in Boston, Massachusetts. They are members of the Northeast Division of the Eastern Conference of the National Hockey League (NHL). The team has been in existence since 1924, entering the league as the first United States-based expansion franchise. They are also an Original Six team. Boston currently has the second highest total of Stanley Cup championships won by an American team at five, with the Detroit Red Wings winning 11. Their home arena is the TD Garden, where they have played since 1995 after leaving the Boston Garden (which had been their home since 1928).Join the roster of your favorite NHL® team wearing this exclusive Boston Bruins jerseys . Constructed to replicate the jerseys worn in the 2010 NHL® Winter Classic Outdoor game, this vintage-styled jersey features a team crest embroidered on the chest and shoulders. Choose to customize Boston Bruins jerseys with either your name or a player's name and number embroidered on the back. Boston Bruins Jerseys from Reebok is a must for the true fan. The features are screen printed tackle twill team logo on chest, plus team logo shoulder crests,NHL shield logo at neck, Under-arm mesh inserts for ventilation,Durable polyester 2-way stretch body is machine washable.
i don't think they are buying these shells so they can design them the way they want, and i would argue that it is strictly economic. back in the heyday of 2005, i worked for a miami firm that specialized in high-end condos, and i would see people buy condos before a shovel is put into the ground. literally, they would buy a condo based off of a computer rendering.
fast-forward to today, the situation in china is, instead of an american yuppy buying property, you have a chinese investment manager in kuala lumpur who is buying up these units by the bulk to meet his numbers for the quarter, with no intention of ever moving into them. hence the house of cards - same game, different players.
you nailed it on the head dot... Investors buy something off of a rendering and a perseption, and they are perhaps foolishly convincing themselves that they can eventually unload the property for a large profit... I guess that is why the bubble is bound to burst. Hopefully the US recovers quickly now so that when China's bubble burst all the US Arch's that have fled here can make a mass exodus back to the US of A.
From the project I worked on there I got the impression that the developer could not sell until the structural frame was up - thus the selling of structure-only projects is equivalent to buying from a rendering in the US.
There is also a tendency to offer different finish packages or allow the buyer to do their own interiors.
china bubble
hey y'all! longtime reader, first time caller.
so, there's been some talk about a massive china real estate bubble. scary stuff on the global scale, especially for us (mostly) unemployed architects who are still sucking on the proverbial chinese teat.
why, just yesterday, james chanos gave the following prediction about the china real estate market. this is a dude who foresaw the enron debacle.
From his MSNBC interview:
"We are not calling for an impending crash of China or of the Shanghai stock market, but in particular the bubble that has been blown up in real estate both commercial and residential as well as other forms of fixed asset investment in china is unprecedented," Chanos said.
"I do see all of the signs of a credit induced real estate bubble that i think is going to be a doozy," he added.
He said there are about 30 billion square feet of space in construction only in the commercial property sector.
read the rest of the interview here: http://www.cnbc.com/id/35056774
seems that many american architecture firms that have survived thus far have a lot of work leveraged in china. for that reason, this is scary stuff.
thoughts? contention?
this is all making me a little verklempt. talk amongst yourselves!!
I think its important to put this in context, and that context casts real doubt on Chanos' conclusions. Chanos appears to be in the real minority among bigshot investors and financiers. The feeling among other experts seems to be that he is incorrectly using analytical techniques used correctly to evaluate corporations (Enron) to the political economy of an entire country - which is wrong.
http://www.forbes.com/2010/01/11/china-bubble-chanos-leadership-managing-rein.html
http://www.nydailynews.com/money/2010/01/25/2010-01-25_chinas_making_right_moves_controlling_growth_to_keep_economy_from_overheating_wi.html
http://www.digitaljournal.com/article/285686
So no need to panic. If y'all want to go make 50% of your US salaries by moving to China and working for Chinese architects for Renminbi, you will continue to have ample opportunities to do so.
a rebuttal from thomas friedman.
http://www.nytimes.com/2010/01/13/opinion/13friedman.html?scp=1&sq=friedman%20china%20bubble&st=cse
Lol... "So I asked several Taiwanese businessmen whether they would “short” China. They vigorously shook their heads no as if I’d asked if they’d go one on one with LeBron James."
I think it's worth pointing out that many seem to suspect that Chanos' diatribe really has less to do with China but with our own country's domestic politics - something that Chanos has done repeatedly in other editorial pieces and statements in which China wasn't mentioned. Chanos knows nothing about China and cares even less about it. Instead, the suspicion is that he is really trying to grind a domestic, American political axe against Obama's stimulus activities and in favor of Republican trickle-down theory. In short, Chanos is using "China" when he is really saying "America," in order to bash the Keynesian he thinks that the current administration is embracing. By attacking the Chinese stimulus as "bubble-creating" he is really complaining about Dems in America.
Needless to say, as a Dem, I call bullshite. Who knows what's going to happen in China, but I don't think this has anything to do with China. It's really about teabagging.
urb... i agree with the points made about the chanos agenda. that said, i think that this is an interesting rebuttal by a NYT reader, in response to the friedman article:
"Friedman's trumped-up debate with Chanos is meaningless without specification of a time horizon. Friedman is obviously talking long-term, and I don't think Chanos has said China will permanently collapse like Enron. But the stock market could easily drop 50% in the near-medium term. So Chanos' bet is sound, and Friedman is just pontificating."
i still think that this type of short-term, albeit collapse could create scary global shockwaves that do, indeed, reshape working conditions for architects/designers for years and years.
More seriously though, does anybody know where he gets the 30 billion square feet of commercial office space number from? If that number's real, it is worrisome, but I'm not sure it's correct.
We track some of this stuff in the big picture research we do.. The only number I've seen that comes close to to 30 million is the 29 billion square feet (2.74 billion square meters) in total space under development/construction COMMERCIALLY, which China's National Bureau of Statistics defines as ALL private residential, office and factory development (what it calls "commercial" development). If so, and Chanos does not really have a mysterious data source that nobody else has seen, it is possible that the 30 billion in office development is a mistake (and that it’s really office, industrial AND residential development together, which is a completely different figure).
If that 2.74 billion sq m includes a large proportion of residential development, then it equates to a 7% or so rate of inventory replacement on China's total residential inventory of 310 bllion square feet or so, plus its 90 billion square square feet of existing non-residential inventory (a total of 400 billion square feet).
To give comparable numbers for the US, according to the AIA, there are 250 billion sq feet in total inventory (divided into 170 billion sq ft of residential and 80 billion square feet in non-residential) in the US, of which 11.75 billion sq ft must be replaced each year (either through new construction or substantial renovation). 1/3rd of that is non-residential, 2/3rds is residential.
China has over four times our population, has a lot more catching up to do, has much less existing stock, and a much faster economic growth rate, so 30 billion sq ft total (not office) may not be that unreasonable. But if Chanos is right and it's just office space, I'd be a bit worried (in a health economy, non-residential commercial space is about 1/3rd of total inventory. In that case, their current rate of construction is about twice to three times what it should be, for a health steady state). It all comes down to where Chanos gets that 30 billion from. If it’s from the National Bureau, he has it wrong.. over semantics.
Put another way, if 30 billion sq ft equates to a 5x5 (actually 4x5 by my calcualtion) space for every Chinese person, then our 11.75 billion sq ft in run-rate inventory building stock replacement (per AIA) equates to a 4x8 space for every American person. If he has an issue with that, then there's more than one bubble he should be concerned about.
clearly. but we here in the us are totally effed, and we already know it.
I am curious how much of that 11.75 billion square feet is architect designed. NCARB says that there are 96,966 architects in the US. That's only 121,000 sq ft per architect per year - roughly one commercial offical building or big box store, one 60 unit apartment block with parking, or one eight story commercial office building. That probably equates to, say, $360,000 or so, in fees for said architect (going off average cosntruction costs) - just enough work for a SINGLE architect (no supporting designers, draftsmen, etc) + office support at standard cost multipliers for one year. That should give one a general idea how tough of a profession architecture is.
James Chanos on Charlie Rose
http://www.charlierose.com/view/interview/10960
China, thus far, is showing no sign of an upcoming economic meltdown.
Although, I work in the Linked Hybrid design by Steven Holl. It is designed as an apartment building, but the majority of the tenants are small offices. I would say that about 95% of the complex is vacant. So I am sure that the developers are not all that happy with Mr. Holl's creation. I think that the bottom line is that China is in its own bubble and the newly wealthy Chinese have absolutely no idea what to do with thier money. They therefore, commission STARchitects to design "eye catching" buildings that end up being failures in the long run. However this does not seem to discourage their investments in the slightest. I think as long as their are people with money that are ready to make bad decisions in China then it will be fine and serve as a gallery for incredibly unsuccessful pieces of architecture that serve as pieces of art in the urban landscape.
China is still going strong... well as strong as possible (It is China you know)
^ Dubai much?
It seems very like Dubai, but don't forget that Dubai is the size of a neighbourhood in Shanghai or Beijing!
95% vacant. That's a success story :).
I was skeptical of this Chanos guy until I watched the interview. He makes a compelling argument. The points that stuck out are:
1. Friedman makes the counter argument that China has enough foreign reserves to bail them out of a bubble collapse, but historically, the only other two countries that had this proportion of foreign reserves to GDP was the United states in 1929, and Japan in 1989 before the lost decade. It's exactly the fact that the country is cash-heavy that perpetuates the bubble.
2. The ratio of investment on speculative real estate grossly over-shadows investment on infrastructure and middle class housing. Although China is building a lot of roads, this pales in comparison to the level of real estate flipping from foreign nationals (Dubai much?). China is doing a lot of stuff in a big way, but he argues they are a doing even more bad stuff in a big way. You have to look at it proportionately.
They say China can grow into this boom, but I don't think they can if the middle-class keeps getting pinched, much like the situation here in the US.
dot, agreed Chanos was very convincing...
Also, maybe someone with more info can confirm but Chanos mentioned that the luxury condos being built (that are fueling the boom) are never more than just the box. They are sold unfinished. And I don't mean furnished but actually as in raw concrete everywhere still?
Anyone know? Perhaps 1327?
this thread is relevant. can someone answer nam's question?
eagerly awaiting the burst.
@namhenderson, that's a common practice in many "developing" countries.
I know that in most ex-USSR countries (Russia, Ukraine, etc.) luxury buildings are usually sold that way.
I would say it is not just a question of economics but personalization.
You can design a 1-bedroom loft while your neighbour above you can build a 4-bedroom baroque-style apartment with the same area and external dimensions.
hmmm... interesting.
Tried to watch the Chanos video but was of course unable to because I am in China! hahaha so I can't comment on that but here are a few observations:
I have worked on some multi-family highrises in Beijing but they are new construction with no existing concrete infrastructure. However, there are hundreds and hundreds of concrete skeletons in the sky that are being worked on 24/7. I wouldn't doubt that investors are purchasing apartments in a concrete skeleton before the construction is complete... however I do think that they are purchasing a final product that is to be completely finished, not just a concrete box.
The manner that things are constructed here is unbelievable as well. My boss quite often tells us that we our buildings must have a concept/spatial arrangement that this extremely well thoughtout and articulated, because we can garantee that the construction will be shody to say the least. As I said, I work in an office in a Steven Holl building and I would have loved to have seen Holl's face when he examined the final product. The craftsmanhip and attention to detail is absolutely retchid.... that said I don't think that generally chinese investors care about what the completed project looks like. They seem to only care about the bottom line and bringing money in.
Often we will design an interior apartment layout or exterior elevation and the client will never comment on. As long as a traditional chinese person would accept the living conditions and the elevation is "eye catching" then they don't give a shit. I swear everytime I am told to design something "eye catching" by a client I internally roll my eyes and think about all the stupid shit that they think is eye catching... yes a big silver sphere at every entrance with a diameter of 6 meters would be great (roll my eyes)... they are always just wanting to slap some afterthought on the facade so that it is different. One client even said that he would prefer the facade to be really ugly rather than typical.
anyway I hope that sort of answered the question :)
okay... I was able to FINALLy watch the video... very fascinating! Thanks for posting that it was a great video.
My thoughts... I know he talks about selling concrete cells... I have never seen the common householder buy a shell. Developers would probably do that but I haven't observed that either.
It was interesting to hear that charlie Rose thought the chinese govenment understands what they need to do and that they are interested in alternative sources of energy. Perhaps that is more the case in Southern China, but in Beijing that is most definitely not the case unless it is a foreign architect designing the building. Also the Chinese government really shades all the numbers in their favor. I think China is destin for a economic crisis of their own devise, whether it be in the construction market or otherwise. For instance, pollution is measured by the Air Quality Index.... the AQI in my hometown is 11... the AQI in London is 27... the AQI in Beijing is 217! living in this city is the equivalent of smoking 3 packs of cigerettes a day. (one reason why I want to returnto the US) Cancer is rampant and destruction of the environment is unbelievable. If you venture outside of Beijing into the countryside you will stumble upon "forrests" that are less than 15 years old and all the trees are plnted in straightlines. Environmentally China is playing with fire. 16 out of the most 20 polluted cities in the world are in China! So I most definitely do NOT agree with Rose's statement that the "leadership understands the needs of the future" and is interested in alt energy... NOT THE CASE!
All I can say is that alot the brand new high rises are vacant... I live in a very "western area" a complex of high rises buildings that seem to be doing very well though. It is funny because you can see the process of development if you look at the area that I live in... there is one high-rise development after another that were quite obviously built 3 yearish apart and as they get farther away they get taller and taller and trendier and trendier.
Anyway great video... I can't wait till China gets jolted by all their horrible decisions.
The Boston Bruins are a professional ice hockey team based in Boston, Massachusetts. They are members of the Northeast Division of the Eastern Conference of the National Hockey League (NHL). The team has been in existence since 1924, entering the league as the first United States-based expansion franchise. They are also an Original Six team. Boston currently has the second highest total of Stanley Cup championships won by an American team at five, with the Detroit Red Wings winning 11. Their home arena is the TD Garden, where they have played since 1995 after leaving the Boston Garden (which had been their home since 1928).Join the roster of your favorite NHL® team wearing this exclusive Boston Bruins jerseys . Constructed to replicate the jerseys worn in the 2010 NHL® Winter Classic Outdoor game, this vintage-styled jersey features a team crest embroidered on the chest and shoulders. Choose to customize Boston Bruins jerseys with either your name or a player's name and number embroidered on the back. Boston Bruins Jerseys from Reebok is a must for the true fan. The features are screen printed tackle twill team logo on chest, plus team logo shoulder crests,NHL shield logo at neck, Under-arm mesh inserts for ventilation,Durable polyester 2-way stretch body is machine washable.
thanks for the response 1327
nam, 1327, and hawkin,
i don't think they are buying these shells so they can design them the way they want, and i would argue that it is strictly economic. back in the heyday of 2005, i worked for a miami firm that specialized in high-end condos, and i would see people buy condos before a shovel is put into the ground. literally, they would buy a condo based off of a computer rendering.
fast-forward to today, the situation in china is, instead of an american yuppy buying property, you have a chinese investment manager in kuala lumpur who is buying up these units by the bulk to meet his numbers for the quarter, with no intention of ever moving into them. hence the house of cards - same game, different players.
you nailed it on the head dot... Investors buy something off of a rendering and a perseption, and they are perhaps foolishly convincing themselves that they can eventually unload the property for a large profit... I guess that is why the bubble is bound to burst. Hopefully the US recovers quickly now so that when China's bubble burst all the US Arch's that have fled here can make a mass exodus back to the US of A.
From the project I worked on there I got the impression that the developer could not sell until the structural frame was up - thus the selling of structure-only projects is equivalent to buying from a rendering in the US.
There is also a tendency to offer different finish packages or allow the buyer to do their own interiors.
ah the schadenfreude
1327-- the us will be worse off once the china bubble bursts, and us architects in china will become stateless floaters with nowhere to go.
no offense, but it's true.
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