I am looking for the truth about ghost cities in China.
For background, I consider myself knowledgeable in Real Estate. I have a Civil Engineering Degree but have not practiced for +30 years. Way back when, I did take a course in City Planning.
I have three licenses Rental, HOA/Strata, and Trading in Real Estate. I am a long time Real Estate Investor. I have Real Estate investments in 3 States and 3 Provinces.
I especially follow the ongoing Economic situation in China, of which the term Ghost City is just one symptom.
The reason I follow the goings on in China is to find out where the money is going and get there before the big push happens. When I am convinced of a situation, I usually make big "bets." (large investments with some conviction) Like Warren Buffet says, you do not have to take a swing at every pitch, but when one is right in the zone, you take your swing.
One of the key concepts that I have used in my North American real estate portfolio is to know where planned infrastructure is going in and to invest there before it gets built. One of the situations got all messed up but ended up ok. Ie. A large civil infrastructure was being built in an area, and I bought a warehouse in the area that would be serviced by it and was expecting a large boost in RE prices in that area. Large areas of trees were cut down, a few million m^3 of soil was placed for soil compaction etc. Construction was just starting.... then a year later the pro development government got voted out and the project was cancelled! I still ended up making 7 figures on that investment as when covid hit, retailers were shutting down and warehouse prices shot way up. .. The retailers went online and stopped paying for retail space and just need a warehouse at a quarter of the rent/sqf; and a shipping area to package/ship goods.
For this discussion, I think we have to define ghost city first.
In North America, ghost "city." is not really a thing. Ghost towns however are common and are/were towns formed for the exploitation of a certain natural resource such as gold or some other mineral. When the gold dried up or other mineral fell out of favor such as coal, the main employer of the town closed and everyone move(s) away; leaving a ghost town. These towns usually never get past 20,000 people.
By this definition, China does not have any.
According to Google "A ghost town, deserted city, extinct town or abandoned city" is an abandoned settlement, usually one that contains substantial visible remaining buildings.
By this definition, China does not have any.
What is common is for disgruntled Chinese residents to use the term, as in the following video to describe, one of two situations.
1) Where a city is planned and completely built out but has an occupation rate of under 25%.
2) Were a city is planned and 10's or even 100's of the skeletons of buildings are built, but not completed, due to the financial failure of the Developer, such as Evergrand, Country Garden, or Sunac.
I believe the following video names 6 or 7 of these types of "Ghost Cities" please note, often it is the owner or worker doing a video of their property calling the area a "Ghost City" not me.
https://www.youtube.com/watch?v=oMaVyMxMFl0&t=156s
Important time stamps at 4:00 min 7:00 min and 9:00 min.
Also note that I consider The poster China Observer fairly anti China.
4:00 identifies one of China's Structural Problems... Their Tax System.
7:00 identifies a Ghost City that is now over 19 years old. I watched a separate video of this posted two years ago by an owner who said it is still empty after 17 years.
9:00 identifies MY common strategy of investing in an area Before the money flows into that area. BUT in China, it was used in response to a GDP goal set (Previously 10%, now reduced to 5% GDP Growth) by the party and not as a natural development due to demand already in THAT AREA.
If I was told by a high level government official in China that they were going to build a High Speed rail station and a city between two major cities in China and I had the option of making a 500k bet for bare land in that area, I would pass. I might be wrong and miss out, but I would still pass.
This post is long enough already but I can speak to any or all of these topics in detail.