As the Chinese President tries to reassure the private sector that they have nothing to fear from the state as he offers them tax breaks, troubling figures have been released showing that nearly a fifth of all homes in China lay empty.
The equates to tens of millions of homes with nobody living in them and even more worryingly no income being produced by the properties.
In soon to be published figures as much as 22 per cent of homes is currently not in use, according to Professor Gan Li, who runs the main nationwide study. That adds up to more than 50 million empty homes, he said.
This has many experts fearing that homeowners will panic sell if the property market starts showing signs of weakness. Property speculation is seen as a major risk to Chineses social and financial stability.
“There’s no other single country with such a high vacancy rate,” said Gan, of Chengdu’s Southwestern University of Finance and Economics. “Should any crack emerge in the property market, the homes to be offloaded will hit China like a flood.”
This has Gan speculating that the Chinese government may introduce some sort of vacancy tax on property owners.
There’s an economic cost to vacancies too because they’re a drag on supply, which puts upward pressure on prices and crowds young buyers out of the market, according to Kaiji Chen, who co-authored a Federal Reserve Bank of St. Louis working paper called “The Great Housing Boom of China.”
www.ecocropsinternational.com
The equates to tens of millions of homes with nobody living in them and even more worryingly no income being produced by the properties.
In soon to be published figures as much as 22 per cent of homes is currently not in use, according to Professor Gan Li, who runs the main nationwide study. That adds up to more than 50 million empty homes, he said.
This has many experts fearing that homeowners will panic sell if the property market starts showing signs of weakness. Property speculation is seen as a major risk to Chineses social and financial stability.
“There’s no other single country with such a high vacancy rate,” said Gan, of Chengdu’s Southwestern University of Finance and Economics. “Should any crack emerge in the property market, the homes to be offloaded will hit China like a flood.”
This has Gan speculating that the Chinese government may introduce some sort of vacancy tax on property owners.
There’s an economic cost to vacancies too because they’re a drag on supply, which puts upward pressure on prices and crowds young buyers out of the market, according to Kaiji Chen, who co-authored a Federal Reserve Bank of St. Louis working paper called “The Great Housing Boom of China.”
www.ecocropsinternational.com
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