In a surprising and frank critique of China’s beleaguered real estate sector, a former government official has raised concerns about the country’s ability to fill the millions of unoccupied apartments that dot its landscape. This startling revelation comes amid a tumultuous period for China’s property market, which has been in decline since the high-profile default of China Evergrande Group in 2021.
The real estate industry, once seen as a pillar of the Chinese economy, is now struggling, with even established players like Country Garden Holdings facing the specter of bankruptcy. This has eroded confidence among potential homebuyers and investors alike.
Recent data from the National Bureau of Statistics (NBS) paints a grim picture. As of the end of August, the total floor space of unsold residential properties in China stood at a staggering 648 million square meters, equivalent to approximately 7 billion square feet. If we consider the estimated average home size of around 90 square meters, this equates to a jaw-dropping 7.2 million residences.
Experts argue that much of this vacant space includes properties snapped up by speculators during the property boom of 2016 and various residential projects that remain unfinished due to financial difficulties.
Former deputy director He Keng, speaking at a symposium in Dongguan, southern China, has drawn attention to this concerning surplus of empty homes. He stated, “While the estimate may seem exaggerated, it’s highly unlikely that 1.4 billion people could occupy them all.”
This candid evaluation of China’s economically significant real estate industry stands in stark contrast to the Chinese government’s portrayal of the nation’s economy as “resilient” in the face of adversity. A foreign ministry spokesperson recently dismissed doomsday predictions about China’s economy, emphasizing that the issue lies not with the nation’s economy but with the rhetoric surrounding it.
While it’s essential to approach such dire assessments with caution, the scale of vacant properties raises valid questions about the sustainability of China’s property sector. It is incumbent upon the government and industry stakeholders to address the root causes of this crisis and work towards a more stable and sustainable real estate market.
The resilience of the Chinese economy has been tested before, but challenges like this demand proactive solutions to ensure long-term stability. The fate of the real estate sector in China, a cornerstone of its economic growth, now hangs in the balance.
Yuval Noah Harari is an accomplished author with a Bachelor of Arts in Journalism. His passion for storytelling and commitment to journalistic excellence have been the driving forces behind his successful writing career. With a keen eye for detail and a deep understanding of the art of storytelling, Yuval has consistently delivered compelling narratives that captivate readers from all walks of life.