The Chinese government had big plans for real estate, but there are many abandoned villas across the country.
A typical example is the State Guest Mansions in Liaoning Province, a development project with luxurious houses for the upper class. So far, the urban area has seen fences to raise livestock, with no presence of residents.
Overview of the abandoned State Guest Mansions project.
About 643 km northeast of Beijing, the project was initially planned by the Greenland Group , a real estate developer headquartered in Shanghai and groundbreaking in 2010.
According to AFP , within just two years, construction was halted, leaving unfinished houses.
The mansions turned into livestock sheds.
The irony in this villa area will occur during the transitional season – when local farmers begin to plow the land amidst the villas for agriculture. The parking lot should be for abandoned mansions but now is repurposed as a place for storing dried grass and fences to enclose cows between houses.
Chinese farmers take advantage of empty spaces for cultivation.
The interiors of the mansions are perhaps even more terrifying. A thick layer of dust and waste trash is the only “furniture” in the rooms, completely contrasting with the imagination of marble floors and columns, crystal chandeliers, wooden ceilings, and intricate decorations.
Guo – a farmer who grows crops in the villa area – said, “These houses can be sold for millions of dollars, but the wealthy haven’t even bought any of them.”
Abandoned interiors of million-dollar villas.
State Guest Mansions is just one of the luxury housing areas abandoned throughout China. Not far from it is a high-rise complex with dozens of 15-story abandoned buildings invested by China Evergrande Group . It is known that this project is also frozen. This indicates the increasing real estate crisis in China.
The mentioned projects are difficult to recover. China’s largest residential real estate developer, China Evergrande Group, filed for bankruptcy in August 2023. In January 2024, a Hong Kong court ordered the liquidation of the company because it couldn’t repay a $300 billion debt.
According to the Wall Street Journal, about 800,000 out of 1.2 million pre-sold houses by the company remain unfinished.
Many real estate projects in China face a “halt halfway” situation.
Besides China Evergrande Group, many other real estate companies in China are heavily in debt, struggling with losses, leading to unfinished projects. Greenland Group, the owner of the State Guest Mansions turned cattle shed, has defaulted on international bonds worth $400 million.
In recent years, about 50 real estate companies in China have gone bankrupt. As of November 2023, 20 million prepaid houses for customers remain unfinished. This reality erodes the trust of China’s middle-class citizens in the real estate market, further affecting the country’s economy and creating additional risks.
Over-reliance on real estate causes some Chinese families to suffer large losses due to falling house prices.
According to Bloomberg , the Chinese have become wealthy thanks to real estate, with 70% of most of their family assets held in this form. Therefore, a 5% drop in house prices would vaporize CNY 19,000 trillion ($2.7 trillion) worth of assets.
