China's 28 Major Cities Have 12% Vacancy Rate in Housing... "Oversupply Situation"

Apartment in Langfang City
[Image source=Yonhap News]

[Asia Economy Reporter Song Seung-seop] It has been claimed that the housing vacancy rate in 28 major cities in China has exceeded an average of 10%, indicating an oversupply situation.

According to recent data released by the Baker Research Institute, a Chinese real estate research organization, on the 11th (local time), the housing vacancy rate in the 28 cities was 12%. The institute judged that a vacancy rate of 5?10% is reasonable, but exceeding 10% indicates an oversupply condition with a high risk of inventory backlog.

The average vacancy rate in the four major cities?Beijing, Shanghai, Shenzhen, and Guangzhou?was in the 7% range. For second-tier cities, it was 12%, and for third-tier cities, 16%. The city with the highest vacancy rate was Nanchang, the largest city in Jiangxi Province, with a rate in the 20% range. Other cities exceeding 15% included Chongqing, a representative city in the western region, and Langfang in Hebei Province, a satellite city of Beijing. Causes cited included housing purchase regulations, rental yield, and population aging.

China is struggling with a prolonged downturn in the real estate industry, which accounts for 30% of the country's total gross domestic product (GDP). Although various measures to revitalize the real estate market have been introduced, the prevailing analysis is that they have not achieved significant effects. The scale of housing sales in China has declined for 11 consecutive months as of June, marking the longest period since the late 1990s.