More than one in five homes in China’s urban areas is vacant, and a current housing-price correction is putting additional pressure on the owners of such empty properties, according to a nationwide survey by researchers from China’s Southwestern University of Finance and Economics.
The vacancy rate of sold residential homes in urban areas reached 22.4% in 2013, or 49 million homes, up from 20.6% in 2011, according to the Survey and Research Center for China Household Finance, which conducted the analysis.
The researchers surveyed households in 262 counties in 29 provinces, an expanded sample compared with 2011’s survey of households in 80 counties.
The survey included homes left vacant by owners of multiple homes as well as those left empty by owners who have left the city to work elsewhere. In addition to the 49 million sold but vacant units, the survey estimated that China has 3.5 million homes that remain unsold.
In recent years, property developers have rushed into the market to build homes, which have been a popular investment as prices seemed bound to keep rising. But the allure has faded since late 2013, as prices began to stagnate and China lifted restrictions on individuals’ investments in alternative channels. Many consumers are now investing in wealth-management products or in homes abroad, leaving property firms with hefty inventories to clear.
Another property survey released last month by brokerage CLSA Research found that 15% of homes completed in the past five years, or 10.2 million units, are vacant. CLSA studied 609 projects across 12 cities in China, a sample that accounts for 20% of the country’s GDP.
Read more at The Wall Street Journal.