by Russel Norman
The New Zealand Superannuation Fund has, on our behalf, decided to take a $23 million bet on a property development company with significant exposure to China — a country where some reports say that there are 64 million vacant apartments.
The Fund’s stake in Hong Kong-based property development company Sun Hung Kai is the tenth biggest investment the Fund’s made in an international company, according to their December performance report.
Is China the next big property bubble on the brink of collapse?
The Chinese Government has spent much of its massive export revenues on building brand new cities. Trouble is, not many Chinese people can afford the prices of new apartments and some of the cities have become ghost cities — their emptiness visible on Google Earth.
If you find the satellite images interesting, this SBS Dateline report (Australian TV) takes you there on the ground and leaves you wondering how all this building activity could possibly end well.
Russel
Published in Economy, Work, & Welfare | Environment & Resource Management | Parliament | THE GAME | THE ISSUES by Russel Norman on Thu, February 9th, 2012
Tags: china property bubble, ghost city, New Zealand Superannuation Fund, SBS dateline, sun hung kai, super fund
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on the trolls and those who are unable to keep on topic
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Maybe those Greens who want humans living in shoe-box-appartments in Auckland will look at this and reflect on what they are trying to push on NZers.
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Now he’s complaining that we have.
And Russels reason that he knows more than the experts ?(the ones with the highly respected track record of administering the superannuation fund)
Because a newly built city in Inner Mongolia, more than 2000km from Hong Kong, is empty.
The reason Hong Kong property is rising so fast is because the property there is being brought up by wealthiest of the more than billion mainland Chinese who want access to better maternity care, better hospitals, better schools etc.
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If SHKP tank then NZ has a hell of a lot more to worry about than a small investment made by the Super Fund, the NZ economy will be in serious strife.
SHKP are my landlord. As they are to a large part of Hong Kong. They specialize in building first world, high class luxury apartments and buildings. Rents in Hong Kong are high, prices still high and their profits likewise.
A good long-term hold option through thick and thin and $23 million isn’t much exposure.
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The Chinese property market is a bit more complex than a bubble: apartment prices in Shenzhen have actually fallen a bit this year although they’re probably still much higher than they would be without all the property speculation.
Although there are enough vacant apartments in China than there are people in any one city, rumours of an empty city are greatly exaggerated. I was recently in Dongguan (the city most often quoted as being empty) and it was definitely full of people.
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