ART HISTORY/POLITICS - According to a report by Barclays Capital they've found a correlation between skyscraper construction and recessions.
When the Great Depression hit the finishing touches were being put on three of the tallest buildings in New York: 40 Wall Street, the Chrysler Building and the Empire State Building, which were all completed between 1929 and 1931.
The economic crises of the 1970s coincided with the completion of New York’s World Trade Center twin towers, in 1972 and 1973, and Chicago’s Sears Tower in 1974.
The Asian financial crisis hit when Kuala Lumpur’s Petronas Towers were finished in 1997.
Dubai’s $4.1 billion Burj Khalifa, completed in 2010, is now the world’s tallest building. However as it was being built, Dubai nearly went bankrupt and the world slid into the Great Recession.
Right now China is building 66 new skyscrapers (buildings over 240 metres tall). The sheer number currently under construction makes China home to 53% of the 124 skyscrapers now under construction globally, China will increase its stock of skyscrapers by 87% by the time they're completed.
India is not far behind. India currently has 2 skyscrapers completed, but have another 14 under construction, including building the world’s second-tallest tower, in the financial capital Mumbai.
But why is building skyscrapers a sign of trouble ahead?
“Building booms are a sign of excess credit,” says Andrew Lawrence, director of property research at Barclays Capital in Hong Kong.
Historically, skyscraper construction has coincided with easy credit, rising land prices and excessive optimism, but by the time the skyscrapers are finished the economy has slipped into recession.
Combine that with China's already huge real estate bubble and the economic prediction for China and India is dire.
About 80% of new buildings going up are in tier two and three cities, which Barclays called “evidence of the expanding building bubble.”
China's residential property sales are down 50% in Beijing and Shanghai and developers have slashed prices 5 to 20%.
The problem is that in both countries a substantial number of real estate loans aren't being collected. People in China and India are already defaulting on those loans, while simultaneously more skyscrapers are being proposed. In India non performing loans went up 33% in the first half of this fiscal year, according to the Reserve Bank of India.
Its unknown exactly how many people are defaulting on their loans in China, but its believed the number will be huge. China doesn't do anything small.
Advertising Amenities Architecture Bizarre and Interesting Real Estate Commercial Real Estate Condo Sales and Prices Construction Credit Dream Home Economics Electricity and Alternative Energy Flipping Properties Gardening Glossary Home Insurance Home Related Home Sales House Prices Housing Starts Interest Rates Landscaping Legal Issues Montreal Real Estate Mortgages Moving Notes Off Grid Homes Ontario Overseas Real Estate Parking Plumbing QUEST FOR A CONDO Real Estate Brokers Real Estate Bubbles Real Estate History Real Estate Humour Real Estate Investment Real Estate Quotes Renovations Renting Taxes The Home Office Toronto Real Estate Trends Urban Planning US Real Estate Vancouver Real Estate
Okay, maybe not worth dying for. After all if you're dead, you can't enjoy the beauty of these interesting and inspired kitchen desi...
If you've been following MY QUEST FOR A CONDO then you know I am trying to trade up and eventually get a condo in Toronto... via tradin...
The photo you are looking at above is a Google Street View photo of Antoine Berthelet Avenue in Montreal. The reason why is because th...
Did you know Toronto is one of the most expensive places to rent an apartment? In Toronto the average price of a two-bedroom apartment is $1...
CANADA - Looking to buy a cottage in Muskoka this summer? Good luck with that! (sarcasm) The cottage prices in the region are sky high (ie....
The Bank of Canada has raised interest rates again, making it more difficult for people to get a mortgage at an affordable rate. The key ove...
I was looking for something else when I found this artist's rendering of an architectural piece that looks like a King Cobra. I though...
Kyle MacDonald is a Canadian Blogger who created a website called "One Red Paperclip". What he did was barter and trade his 1 re...
Some people who are superstitious would prefer to avoid a house with a history... ie. its supposedly haunted. Wooooooooo... spooky! Others...
Whether you are building your dream home or looking to flip a house for a handsome profit, polished concrete is the way to go. I first s...