D H
Jun 7 · Last update 2 mo. ago.

What is behind China’s housing crisis?

There are around 65 million vacant homes in China, a total of about a fifth of all urban properties in the country, and oversupply and overvaluation have been long thought to be generating a massive speculative housing bubble in the country. China has a one of the highest rates of home ownership in the world, around 90%, and with consumption remaining comparatively low Chinese families often pool resources to buy second and third homes, as tight currency controls have left housing a popular asset. Some fear that such a massive amount of money in property is deterring investment and helping to stifle innovation, and these concerns are intertwined with the fact that China is also on the verge of a major demographic shift, a massive ageing population looks set to cause population decline. However a Chinese housing crash has long been speculated but failed to materialise, leaving some doubting the veracity of such claims. Is China on the verge of a 2008 style economic crash ignited by a real estate bubble? tradingeconomics.com/china/home-ownership-rate 247wallst.com/economy/2019/01/08/china-has-65-million-empty-apartments
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Policy change will fix China's housing
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Policy change will fix China's housing

While warnings of a Chinese property crash have failed to materialise China has become increasingly strict on on property regulations that are helping to control the possibility of the housing market becoming too volatile. Dozens of Chinese cities have already passed legislation to drive out property speculators, by capping prices set by developers and preventing real estate agents from setting excessively high second home prices. It has also been suggested that the Chinese housing market could very simply be corrected by encouraging renters, and in 2017 the Chinese government launched the “Focus on Both the Rental and Sales Housing Markets” initiative. This set of policies has helped to encourage more rental properties by providing tax break incentives for renters and for landlords who rent out unused homes. Demographics shifts pose a significant economic issue also for China, but the announcement of a three child policy in 2021 it is clear that China is making the incremental changes to address these issues, while concern will not disappear it is clear so far these incremental changes have not led to a 2008 style crisis.

forbes.com/sites/wadeshepard/2019/10/29/china-now-has-an-answer-to-its-housing-crisisits-called-rent/?sh=5a3577ec1a60 theguardian.com/world/2021/may/31/china-announces-three-child-limit-in-major-policy-shift reuters.com/world/china/chinas-new-home-price-increases-quicken-again-april-2021-05-17

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D H
Jun 7
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