The hose next to me was flipped. I knew the guy doing it. The house was pretty much trashed. He put a lot of money into it. He is an accountant and run the numbers and determined he could make a profit on it. He let me walk through the house a couple of times. It was nice when he finished. And the counter tops were NOT granite.
In a lot of instances, it is cheaper to fix up a dump than to build new becasue of all the taxes on hook ups, etc. that come with new property. I know they do this up at the lake (Tahoe). They will buy a 1 M$ house and level it so they can get the hooks ups and put a 5 M$ hose in its place.
Me thinks that the PRC is violating folks' property rights with this. The final outcome will probably be a lot of run down house. Let the market take its course. That being said, it is very difficult to build new in the PRC over all the environmental regulations, taxes, and hook up fees. I would posit that this is on purpose to gentrify the PRC.