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China's 1.4 billion population isn't enough to fill the country's empty homes, former official says
(www.businessinsider.com)
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this post was submitted on 24 Sep 2023
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It's a problem for people who indebted themselves to buy those homes with a valuation based on scarcity. Also a problem for the real estate Chinese companies, sector which represents a quarter of Chinese economy.
Sounds to me like China is trying to solve both of those problems by lowering property scarcity - if this stays controlled it will make properties cheaper so people don't need to acquire as much debt and it will shrink the real estate sector. Since this housing is built through centralized control and not a market, it should be totally under control.
Obviously something unexpected could happen that blindsides the Party, but it looks like politics is in command and everything is proceeding as expected.
There should always be a reserve supply of vacant properties to give people freedom of movement between regions and cities.
65M is what percentage of 1.4Bn? It's about 5%.
5% oversupply is pretty reasonable, especially given that the housing isn't fungible and the populations are more mobile than the houses are.
That doesn't actually mean there are 65 million surplus properties. A vacant house isn't an unnecessary house. Children move out all the time, families sometimes break up, Chinese citizens currently living overseas or in Europe return home, etc.
I bet there's actually math for this - I wonder if anyone has calculated the optimal amount of vacancies?
Sometimes, you misspeculate. Some developers lost a whole fuck ton of money on the project, but that's more than made up for if you can turn a profit on projects near big cities (which demand is still sky high for).
Is anyone? If I have to choose between "housing shortage" and "housing surplus" I know which society I would prefer.
China isn't really limited by construction resources. There's a heavier constraint in terms of hospital staff and teachers than there is on construction resources.
They're also building hospitals and schools so...