Find above an interesting video report aired on ABC’s The Business yesterday, taking a look inside China’s real estate bust, whereby years of over-building have left a huge glut of homes and commercial properties across many of China’s smaller cities.
Key points from the report include:
- Land sales are down 32% by area and 25% in value;
- Rents are falling and vacancy rates are rising, particularly across the smaller cities; and
- Asia’s richest man can see the writing on the wall, trimming his portfolio since 2011.
While watching the video, consider how much of Australia’s iron ore and coking coal has gone into the construction of such projects. Recall as well the below chart, which shows that 95% of the Chinese residential construction is outside of the major cities:
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Then consider how commodity prices will be effected as demand from China slows and supply from Australia and elsewhere continues to rise.
