A Tale of China’s Two Housing Markets
A few cities’ real estate sectors will bottom out this year, while others will struggle with empty flats for decades to come.
No easy fix.
Photographer: Qilai Shen/BloombergChina is making its most forceful attempt yet to end an unprecedented property downturn. Mopping up excess supply is now on the priority list. To de-stock, local governments have now been urged to buy unsold apartments with cheap billion-dollar loans from the central bank.
Nationwide, China has about 400 million square meters of newly completed but unsold flats. At the current sell-through rate, it will take about 30 months for the market to fully digest. This is a lot higher than the one-year threshold that the industry deems is necessary for property prices to stabilize. Given that homeowners have been racing to list their flats while potential buyers bargain hunt in the secondary market, China’s real estate industry seems very troubled indeed.