Because city and local officials make huge profits with these development. Remember, land is owned by the government. And no one is accountable for failed investment. Cheapest materials are used, getting done fast is important because the developer wants to get out of it as quickly as possible. It fits the prevalent theme in China right now: get rich quick and leave the country fast.
I always assumed the stories about empty cities were like street interviews. Pick what fits the target narrative and toss the rest, even if the rest contradicts the narrative.
There is a lot of truth the empty city/empty building story, mostly just classic overbuilding. Its just not the issue in Changsha, which is a booming city coming into its own right now (though they may be overbuilding). I've only been there once about 10 years ago, but I go to Hunan relatively often. Its not like Inner Mongolia where you could just build an empty city on the plains. The area is heavily populated.
It's always good to hear straight from people who aren't a continent or more removed from the subject. Where's a good place to look if I want to find out more about the real estate situation around China?
I'm not sure, China is a big place and many local factors apply.
Natural resources in the west and northwest dominate, which is why there are ghost boom towns (people looking to do something with that money). Shanghai/Guangzhou are financial centers and become incredibly expensive, Beijing is the center of government but will always trail Shanghai. The south is dense but not that much arable land (compared to say India, China is mostly mountains). Yunnan (out west) has great weather and ethnic diversity; you'd think Kunming could eventually become China's San Francisco but capital and skillz are all concentrated in the east.
You could probably pick a city or region and analyze it to death.
http://www.bbc.co.uk/news/magazine-19049254
http://www.dailymail.co.uk/news/article-1339536/
So one has to ask why.