China's property sector, once the pillar of the economy, has slumped since 2021 when real estate giant China Evergrande Group defaulted on its debt obligations following a clampdown on new borrowing.
Even China's population of 1.4 billion would not be enough to fill all the empty apartments littered across the country, a former official said on Saturday, in a rare public critique of the country's crisis-hit property market.
China's property sector, once the pillar of the economy, has slumped since 2021 when real estate giant China Evergrande Group (3333.HK) defaulted on its debt obligations following a clampdown on new borrowing.
Big-name developers such as Country Garden Holdings (2007.HK) continue to teeter close to default even to this day, keeping home-buyer sentiment depressed.
As of the end of August, the combined floor area of unsold homes stood at 648 million square metres (7 billion square feet), the latest data from the National Bureau of Statistics (NBS) show.
That would be equal to 7.2 million homes, according to Reuters calculations, based on the average home size of 90 square metres.
I find it interesting that everyone is calling this bad management when it's indicating one thing above all:
Productivity has well exceeded the requirements of the population.
People simply don't need to work that hard anymore, but all industrialized societies, even would-be socialists, simply can't stand the idea of letting the working class have leisure time.
When you make the only safe place for money real estate, then your corrupt Politicians make that only safe for the wealthy and connected, you end up with a lot of empty useless real estate.
Nah. China's urbanization rate is currently 65%. South Korea for comparison has 82% urbanization rate. So the Chinese have plenty more (say, a hundred million or so more) homes to build. The current difficulties are more to do with (i) loss of consumer confidence caused by the leadership's bad economic management, and (ii) the deliberate restriction of credit to developers because of the government's concerns about debt.
This analysis reminds me of the hoo-hah about China's "ghost cities" circa 2010. Those ghost cities ended up being filled up.
For many mainland Chinese people, real estate is the only place they can invest their money. Traditionally and culturally it's also seen as the only possible way to rise up and do better.
The money export controls make it difficult for the average guy to move his money abroad as well.
So there are many Chinese people putting retirement or family savings into these places because they don't have other options.
They have also just had a very long run of easy government backed mortgage support, making it a bit too easy to borrow money for these properties.
It's crazy and doesn't make long term sense when the number of domiciles exceeds the number of people.
This is important, not least because making the cement and steel for these surplus apartments and associated road infrastructure makes an enormous contribution to global CO2 emissions. Look at how the emissions took off after 2005. So the sooner the bubble bursts, the better for the climate.
BEIJING, Sept 23 (Reuters) - Even China's population of 1.4 billion would not be enough to fill all the empty apartments littered across the country, a former official said on Saturday, in a rare public critique of the country's crisis-hit property market.
Big-name developers such as Country Garden Holdings (2007.HK) continue to teeter close to default even to this day, keeping home-buyer sentiment depressed.
As of the end of August, the combined floor area of unsold homes stood at 648 million square metres (7 billion square feet), the latest data from the National Bureau of Statistics (NBS) show.
That does not count the numerous residential projects that have already been sold but not yet completed due to cash-flow problems, or the multiple homes purchased by speculators in the last market upturn in 2016 that remain vacant, which together make up the bulk of unused space, experts estimate.
"That estimate might be a bit much, but 1.4 billion people probably can't fill them," He said at a forum in the southern Chinese city Dongguan, according to a video released by the official media China News Service.
His negative view of the economically significant sector at a public forum stands in sharp contrast to the official narrative that the Chinese economy is "resilient".
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