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Frank Hovis

Ridiculously poor Chinese housebuilding

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I'd seen pictures of newbuild blocks of flats that had fallen down, heard about the Chinese obsession with buying new above all else without overmuch regard to quality and their property boom but this links the three together.  

It's eleven minutes though you'll get the picture in thirty seconds.  It shows incredibly badly built, though superficially attractive, houses that have been thrown up and sold for incredible prices and then either not lived in or only lived in initially and then allowed to fall apart.

The house they start with looks like it has been abandoned for decades but it is two years' old.

This video is an awesome window upon a dysfunctional economy IMHO.

 

 

Edited by Frank Hovis

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What I find amazing is that a couple of guys on motorbikes can produce an informative video that's equal to what the So-Called BBC produces....

the So-Called BBC could give these two £100k for half a dozen 30 minute programmes.... Why do the So-Called BBC pay their presenters hundreds of thousands?

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You only have to go to liveleak to see seemingly endless videos of things collapsing in China - be it buildings, lifts, escalators, etc. It is frightening as often people are maimed or lose their lives when such things happen.

Life seems very cheap out there in China I fear.

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A VP of a company I used to work for had a secondment out in Shanghai for a few years, starting about 8 or 9 years ago, so the (minor) incident I describe below would have happened in about 2011/12.

He was staying in a newish block of flats, and somebody said that there was a gas leak outside (so hopefully not too dangerous).  Anyway, he wandered over (how people like this get promotions, I don't know), to have a look, and found that when he put his hand out to shoulder height, the flow of gas up from the ground was enough to keep his hand suspended.

I'm not personally acquainted with many other people who have stayed in recently constructed Chinese residential flats (maybe one other), so his story makes me think such incidents are pretty common.

I'm glad to say he's not a smoker.

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These are "buildings" made for investors, basically they are fake buildings, a concrete veneer on a pile of junk as per the concrete moulding that just flaked apart over whatever substrate was underneath- a construction technique designed to deceive long enough to have the paperwork signed and the loan approved.

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24 minutes ago, BurntBread said:

A VP of a company I used to work for had a secondment out in Shanghai for a few years, starting about 8 or 9 years ago, so the (minor) incident I describe below would have happened in about 2011/12.

He was staying in a newish block of flats, and somebody said that there was a gas leak outside (so hopefully not too dangerous).  Anyway, he wandered over (how people like this get promotions, I don't know), to have a look, and found that when he put his hand out to shoulder height, the flow of gas up from the ground was enough to keep his hand suspended.

I'm not personally acquainted with many other people who have stayed in recently constructed Chinese residential flats (maybe one other), so his story makes me think such incidents are pretty common.

I'm glad to say he's not a smoker.

it was probably fake gas as well

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12 minutes ago, onlyme said:

These are "buildings" made for investors, basically they are fake buildings, a concrete veneer on a pile of junk as per the concrete moulding that just flaked apart over whatever substrate was underneath- a construction technique designed to deceive long enough to have the paperwork signed and the loan approved.

That's what the guys were suggesting, i.e. a vehicle in which to invest your money, but why would an investor buy something so poorly built that it's little more than a building plot with rubble on it?

I understand that property has often been used as a "Magic Money Token" into which money moves and the Token increases in value but there needs to be done underlying value: that you will be able to either live in the property or obtain a rental for it.

Those houses can't be used for either so how do they qualify as an investment?  It's like buying and selling a sealed wooden box full of "gold" without ever being able to open the box and find out that Schrödinger's cat is in fact a housebrick.

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11 minutes ago, Frank Hovis said:

That's what the guys were suggesting, i.e. a vehicle in which to invest your money, but why would an investor buy something so poorly built that it's little more than a building plot with rubble on it?

I understand that property has often been used as a "Magic Money Token" into which money moves and the Token increases in value but there needs to be done underlying value: that you will be able to either live in the property or obtain a rental for it.

Those houses can't be used for either so how do they qualify as an investment?  It's like buying and selling a sealed wooden box full of "gold" without ever being able to open the box and find out that Schrödinger's cat is in fact a housebrick.

My guess is that very few of the investors have even seen their investment except in photos. It's just a bubble waiting for a pin imho.

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An old story, Potemkin villages.

There is a whole lot of really badly-specified building and infrastructure in the Second World, stuff that needs to be completely redone from day one.

Edited by Panther

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Some of the new builds here in the UK are not far behind.  Very shoddy construction.  So bad they all employ a whole tier of snaggers.  I’m thinking Persimmon, Strata, Taylor Wimpey... how the hell do they get away with £200k for a new build 2 bed in a shitty area of West Yorks. Aaah HTB.

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40 minutes ago, Ina said:

Some of the new builds here in the UK are not far behind.  Very shoddy construction.  So bad they all employ a whole tier of snaggers.  I’m thinking Persimmon, Strata, Taylor Wimpey... how the hell do they get away with £200k for a new build 2 bed in a shitty area of West Yorks. Aaah HTB.

And....

No survey.

Unbelievable really; nobody in their right mind would buy a "second hand" house without a survey but a new build gets (wrongly) taken on trust.

House builders actively discourage people from having surveys done because the surveyor will pick up multiple obvious faults that would put people off buying.

One new build I was looking at (though not as a buyer) had taken place over a very wet winter and the lagging material between two walls had got soaked.  I asked how they managed to dry it out and they said they hadn't.  It was still soaked but now sealed in.

To increase profits a build has to be carried out quickly so corners are cut and, something I wouldn't buy, timber framing is used for speed.

Remember that the one and only advantage of timber framing is to speed up construction; it is there to benefit the builder and not the buyer.

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4 hours ago, Frank Hovis said:

I'd seen pictures of newbuild blocks of flats that had fallen down, heard about the Chinese obsession with buying new above all else without overmuch regard to quality and their property boom but this links the three together.  

It's eleven minutes though you'll get the picture in thirty seconds.  It shows incredibly badly built, though superficially attractive, houses that have been thrown up and sold for incredible prices and then either not lived in or only lived in initially and then allowed to fall apart.

The house they start with looks like it has been abandoned for decades but it is two years' old.

This video is an awesome window upon a dysfunctional economy IMHO.

 

 

In KSA I saw what the Chinese Building firms were capable of at King Abdullah Uni (Jeddah) and Al Midra in Dharan. Build standards shockingly awful. Glass panes would regularly fall out of Al Midra running the risk of a repeat of that scene from the Omen (With David Warner) 

https://images.search.yahoo.com/search/images?p=al+midra&fr=mcafee&imgurl=http%3A%2F%2Fqeratonarabia.com%2Fimages%2Fgalleries%2FAl%20Midra_Pilot%20Project%2Fimage-slider-1.jpg#id=4&iurl=http%3A%2F%2Fqeratonarabia.com%2Fimages%2Fgalleries%2FAl%20Midra_Pilot%20Project%2Fimage-slider-1.jpg&action=click

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That's incredibly worrying.  The Chinese domestic real-estate investment market is about 4% of global GDP.  Not Chinese -- global.  The economic health of China is also incredibly important to the world (even more so post-2008) -- If the Chinese property market collapsed there'd be massive ramifications worldwide.

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Just now, dgul said:

That's incredibly worrying.  The Chinese domestic real-estate investment market is about 4% of global GDP.  Not Chinese -- global.  The economic health of China is also incredibly important to the world (even more so post-2008) -- If the Chinese property market collapsed there'd be massive ramifications worldwide.

If the Chinese property market collapses everyone’s retirement age [other than France] goes up by 1 year.

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6 hours ago, Ina said:

Some of the new builds here in the UK are not far behind.  Very shoddy construction.  So bad they all employ a whole tier of snaggers.  I’m thinking Persimmon, Strata, Taylor Wimpey... how the hell do they get away with £200k for a new build 2 bed in a shitty area of West Yorks. Aaah HTB.

Need a lemon law.

Destroy these cunt building companies.

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they did say there were some good ones in there, no doubt their margins are much lower to be competetive.

Chinas a black box as far as i can see, who really knows what goes on there, im sure theres many many layers deeper than these guys are uncovering.

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The West managed to blow the savings accrued over 150 years on an insane property bubble that left them with nothing but housing that was unaffordable and largely unfit for purpose.

The impressive thing about the Chinese is that they have condensed this period into 40 years.

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Just now, dgul said:

That's incredibly worrying.  The Chinese domestic real-estate investment market is about 4% of global GDP.  Not Chinese -- global.  The economic health of China is also incredibly important to the world (even more so post-2008) -- If the Chinese property market collapsed there'd be massive ramifications worldwide.

In a nutshell we're fucked. When China inevitably stalls the rest of the world will too. The Chinese economy is pretty much the global economy.

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Chinese design codes are reasonable, but very conservative- mostly due to the recognition of crap quality control during construction (I.e a western designer would specify a column 0.5m wide, a Chinese designer would make it 1.0m wide an the basis of crap concrete and shonky rebar). 

The problem is you get design not to code coupled with poor construction and corrupt officials turning a blind eye.

A lot of the reinforced concrete residential buildings are covered up with ceramic tile  rendering to hide the crap workmanship

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2 minutes ago, Captain Cavey said:

Chinese design codes are reasonable, but very conservative- mostly due to the recognition of crap quality control during construction (I.e a western designer would specify a column 0.5m wide, a Chinese designer would make it 1.0m wide an the basis of crap concrete and shonky rebar). 

The problem is you get design not to code coupled with poor construction and corrupt officials turning a blind eye.

A lot of the reinforced concrete residential buildings are covered up with ceramic tile  rendering to hide the crap workmanship

Correct, then the tiles fall to the ground below, injuring or killing people as they do so. The video was quite interesting for showing this in action.

The other issue is the stop-start nature of Chinese projects to reflect their main goal, which is the smuggling of USD out of the country and binging it into construction projects around the world. About 25% of Cambodian GDP is Chinese investment this year ($7B). Many projects go at breakneck speed for a few months as they try and burn the latest bing of cash, then fall silent for half a year, save for the clamouring of workers for their unpaid wages.

This method of construction rarely yields good results.

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13 minutes ago, Bkkandrew said:

Correct, then the tiles fall to the ground below, injuring or killing people as they do so. The video was quite interesting for showing this in action.

The other issue is the stop-start nature of Chinese projects to reflect their main goal, which is the smuggling of USD out of the country and binging it into construction projects around the world. About 25% of Cambodian GDP is Chinese investment this year ($7B). Many projects go at breakneck speed for a few months as they try and burn the latest bing of cash, then fall silent for half a year, save for the clamouring of workers for their unpaid wages.

This method of construction rarely yields good results.

Hah. Didn’t watch the vid before posting, but have now. It all rings a bell. 

I’ve worked on a few Chinese built projects and because international money was involved, international practices were mandated. Tried to get them to do a risk assessment for a component of the work and they came back with a statement saying that: if this resulted in only 2 fatalities, it was not a serious incident!

Elsewhere in the world these days, if someone gets a paper cut, work stops for a thorough investigation.

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9 hours ago, dgul said:

That's incredibly worrying.  The Chinese domestic real-estate investment market is about 4% of global GDP.  Not Chinese -- global.  The economic health of China is also incredibly important to the world (even more so post-2008) -- If the Chinese property market collapsed there'd be massive ramifications worldwide.

That was my first thought too. More of a case of when not if. Going to put some cash under the mattress...

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