24 Jun. 2013 | Comments (0)
As referenced in our June 24, 2013, issue of The China Weekly, an eye-opening housing survey conducted by the Beijing police department last year finally garnered attention recently thanks to an article in Caijing, one of China's most important business and finance newspapers. The survey's original purpose was surely security-related rather than economic, but the results revealed that almost 30 percent of Beijing residencies are vacant. This is not to suggest that the apartments are unsold or abandoned, just uninhabited. A vacancy rate that high in an overpopulated city of Beijing's scale confirms that rampant property speculation is as bad or worse than many have guessed. In Beijing's most desirable areas, where prices are highest, the vacancy rate is well over 50 percent. See below for Caijing's brief report:
Beijing Housing Vacancy Rate at 28.9%: Survey06-17 16:05 Caijing
The remarks by Chinese venture capitalist Cha Li, quoted in a report by the South China Morning, sparked a controversial debate among China’s real estate professional and property owners and raised questions about housing vacancy rate of the city.
A survey did by the Beijing Police last year showed the city has 13.2 million units of houses, of which 3.8 million are confirmed vacant, putting its housing vacancy rate at 28.9%, leaving the public in shock and disbelief.
A house is “vacant”, defined in the survey, if no one lives in it for at least half a year, according to a staff who conducted the survey explained.
The figure, however, could be somehow inaccurate since there may be some owners away on a long trip, said the staff.
Meanwhile, vacancy rates of newly-built houses are generally higher than 33.3%, said the survey which referred to data from real estate agencies.
High vacancy rate in newly-built houses is also believed to be a major force behind rising house prices despite the Chinese government’s repeated cooling measures including purchase restraints to curb price hikes.
Beijing's largest district Chaoyang in 2010 released figures showing that a total of 1.33 million square meters of residential space are vacant and 54.9% of homes have been empty for at least three years.
The US home vacancy is 2.1%, latest statistics released in March showed, compared to 1.90% last quarter and 2.20% last year. This is higher than the long term average of 1.56%.
The Chinese government could channel the large amount of vacant homes into market by introducing property taxes on third-home owners in a bid to reduce vacancy rate and increase supply as well, suggested the 21st Century Business Herald.
Impropriately high housing prices in a city would not attract investors and talents, and will cut its competitive edge, said the paper.