Liu Hong and her parents own four houses in various cities across the Chinese mainland, three of which are unoccupied. The 36-year-old, who works as an auditor in Shanghai, bought an apartment in her hometown of Harbin in northern Heilongjiang province for 320,000 yuan ($47,500) 13 years ago. The apartment is two blocks from her parents’ house, an apartment given to her father for free by the school he attended three decades earlier, a common practice in China at the time.
Liu said, “My father and mother insisted that I have my house in Harbin (the provincial capital of Heilongjiang) because they were convinced that one day I would come back and live there, or that I might need it to get money to save for marriage, but none of those things happened, and now My parents are with me in Shanghai after they retired half a year ago.”
Liu bought herself a two-bedroom apartment in Shanghai for 2.6 million yuan ($383.8 thousand) when the market was raging in 2015, after deciding to settle in the city.
When both Harbin and Shanghai get very cold between October and April, her parents travel to Haikou in Hainan Province, southern China, where they own a small vacation home.
“It’s not easy to find a tenant or buyer in Harbin, so we left our old apartments there empty for years. In theory, our family alone has two or three houses where no one lives all year round,” says Liu .
The family’s situation is far from unique. According to most estimates, there are tens of millions of vacant apartments in China. This is likely to pose a problem for the already turbulent Chinese housing market, as the potential glut of vacant homes threatens to further undermine prices.
Downward pressure on house prices
“Many apartments are empty, and this is worrying,” the BRI Research Institute, a Chinese real estate research think tank, warned in its latest study.
“Vacant homes represent a significant potential supply,” the institute said. “When the outlook for the housing market turns poor, a significant portion of vacant homes will be placed on the market, and downward pressure may weigh on home prices.”
According to a BRI report released earlier this month, the average vacancy rate across mainland China is 12.1 percent, compared with 11.1 percent in the United States and 9.8 percent in Australia, which are higher. Far more than just in the UK (0.9 per cent) homes are empty. The rate amounts to approximately 50 million unoccupied apartments when applied to the study.
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Last year, according to economist Ren Ziping, formerly of the Development Research Center, adding his 2020 estimates to the official figures for the number of houses built since then, the housing boom was over.
There are approximately 400 million homes in China, and that staggering number is nearly 16 times the total number of homes, whether occupied, occupied or empty, in Hong Kong. While Capital Economics, a London-based research and advisory firm, says the number is much higher. The company estimated last year that mainland China was home to about 30 million unsold properties, while another 100 million were likely bought but not occupied. All of this falls under bad news for people like Liu and others. Homeowners across China may struggle to find buyers to buy their vacant units as the boom in the housing market winds down.
“Some of the vacant houses are the remnants of the hectic period between 2016 and 2018 when people flocked to buy houses for investment,” said Sunshine Li, a real estate agent in Nanchang, capital of eastern Jiangxi province. Nanchang is uninhabited, making it first among the 28 major cities monitored by the Belt and Road Initiative.
The report, and especially the city ranking, sparked a heated debate on social media, with Nanchang residents reacting angrily on Weibo, the Chinese equivalent of Twitter, declaring that they certainly do not have the most empty houses. The backlash prompted the report’s authors to issue an apology to the WeChat account on the evening of August 11, saying that its search procedures may not be the case.
They said its statistics were “rigorous enough” and promised to review their numbers with local authorities to provide a more accurate report, but whatever the differences between individual cities, the fact that there are millions of homes across the country is, is undoubtedly. 2017, her family owns a three-story semi-detached house in Kunshan, a coastal city in Jiangsu Province, which the family keeps as a retirement home for her parents. She feels secure in getting the house, and if there is any (financial) uncertainty in the future, then she can “exchange the property for money,” says Feng, who has acquired all four of her family’s properties, including the luxury home . 4 million yuan ($590.5 million), which is vacant in Kunshan.