[Xi] repeated the slogan during the opening speech of the 19th National Congress of the Chinese Communist Party in October 2017. He continued by saying “China will accelerate establishing a system with supply from multiple parties, affordability from different channels, and make rental housing as important as home purchasing”.
Those ghost cities are building up whole communities before the demand becomes such for people to move in. Those cities aren’t empty for long, though. And since they were centrally planned from the beginning, they have better utilization of public services like transit that make life more pleasant for the population.
Do I wish they were building to house their population rather than overproducing in order to artificially lower prices? One hundred percent, yes. Do I think that means this is a bad way to do it? It’s certainly better than the “if you wanted a house, you should’ve bought 30 years ago” policy of the liberal capitalist world
How would that work? House prices are inversely proportional to housing availability. How do you let people buy houses at reasonable prices while also allowing people to sell them at increased prices?
You stop using market indicators to determine the price of housing. Pay the people for the work they did and then sell the final product for less than the cost it took to make it. The government covers the difference, since it benefits most from a happy, secure population.
That also breaks the incentive to hoard housing, since there’s no way reselling can compete with new housing. And resales could get refurbished after being sold, and then again the price won’t reflect the cost of the refurb. Keeping everyone in good housing, not just sufficient housing.
But that would have exactly the effect of overproducing and artificially lowering prices. And isn’t that exactly what they’re doing? (ie the workers get paid, people get to move into subsidized housing, the investors are left holding the bag).
That said, I don’t think overproduction is really a practical thing when it comes to housing. Perfect production would be when everyone who wants a house, has one. Overproduction would be more houses than we know what to do with and we’re nowhere close to that. I’d say we’re generally in a state of acute underproduction when it comes to housing and that’s been keeping prices artificially high.
No one is moving into those tofu dreg condos.