China's residential vacancy rate rises to 22.4% of residences, up from 20.6% in 2011, finds survey, with measure a sign of cooling real estate market; about 49 million residences are currently empty, about US$674B in mortgage loans are outstanding
June 12, 2014
(UPI International Top News)
– A survey indicates 22.4 percent of residences in China are vacant, a sign of a cooling real estate market and potential trouble for the Chinese economy.
The report, by China's Southwestern University of Finance and Economics, said the number of vacant homes grew from 20.6 percent in 2011. Owners chose to leave the homes empty instead of sell them, and builders and investors who constructed them during a housing boom fueled by relaxed credit rules are concerned more about unsold inventory than building more.
About 49 million residences are currently empty in China, and about $674 billion in mortgage loans are outstanding.
Home prices are expected to fall 5 percent in 2014, a Standard & Poor's analysis said, after rising 11.5 percent in 2013.
The issue is the number of vacant apartments in China's largest cities. The real estate market has been a widespread and popular investment, but little growth in value has been observed as investment in other sectors of the economy has grown.
"Vacant homes are more likely to cause losses and push owners into negative equity once home prices fall," Gan Li, head of the China Household Finance Survey and Research Center, told the South China Morning Post.
The Southwestern University of Finance and Economics surveyed households in 262 Chinese counties in 29 provinces.
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