Vacancy Rates Sign Of Trouble For China's Property Mkt
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SHANGHAI (AP)--A surge in the number of vacant, newly built apartments suggests China's real estate market may be facing a financial fallout, reports said Tuesday.
China had 123 million square meters of unsold and unleased space in new buildings by the end of March, a rise of about 24% over a year earlier, the Shanghai Daily and other state-run newspapers reported.
That figure does not include property purchased for speculative reasons, much of which also remains unoccupied, the reports said, citing figures released by the National Bureau of Statistics.
"Last year's figures in Shanghai showed that up to half of the new housing sold was not used," the China Daily cited Yin Zhongli, a real estate expert with the government-run Chinese Academy of Social Sciences, as saying.
High vacancy rates could "disturb the market order" and trigger a financial crisis, Yin said.
Beijing, Shanghai and other major Chinese cities are evicting millions of residents as they raze older housing in the city centers to make way for urban renewal, luxury housing and commercial projects.
Meanwhile, low and middle-income families are increasingly priced out of the market, despite government pledges to make more affordable housing available for ordinary families.
The China Daily cited a report by Beijing Normal University's Finance Research Center showing that at least 70% of city dwellers cannot afford to purchase new apartments.
Investment in apartments meant for low and medium income families rose by less than 3%, compared with a 23% rise in total spending on residential property, it said.
Almost 60% of the unrented and unsold property is in the residential sector, it said, meaning an estimated 700,000 apartments are unoccupied.
The government began cracking down on speculative real estate purchases last year, ordering local governments to take action to prevent prices from spiraling out of control. Shanghai boosted taxes on real estate transactions and ordered banks to limit credit for property deals, among other measures.
(END) Dow Jones Newswires
April 25, 2006 00:37 ET (04:37 GMT)
Copyright (c) 2006 Dow Jones & Company, Inc.- - 12 37 AM EDT 04-25-06 |
