One of the most frustrating parts of living in Shanghai as a middle class income holder is knowing that, while you can’t afford an apartment, half the stock in the city is sitting empty thanks to zealous richer-than-you investors. That probably explains the grassroots turnout for helping Sina.com’s investigation into empty houses in cities.
The investigation came about after a report from the National Bureau of Statistics found that unsold homes rose 0.2% in terms of floor space at the end of June. But the report didn’t provide much specifics and refused to talk about the “housing vacancy rate” – a widely debated issue that many feel goes straight to the heart of accusations of real estate speculation.
“There are no official and reliable figures to reflect the vacancy rate in the current housing market, but for those who care about the healthy operation of the market, we feel responsible to do the research,” Sina.com’s online survey editor, Liao Lanxin told People’s Daily:
Using the most direct and grassroots methodology by counting the rooms with lights on, netizens get a look at the current housing market, she added.
Of more than 10,000 online users polled, 91.1 percent said the number of unoccupied properties is outrageously high in their cities. Some 88.8 percent polled said that property prices are directly pushed up by speculators who buy a number of houses and leave them vacant…
Chen Sheng, director of the China Index Academy in Shanghai, said the netizen activity shows the public, especially those who cannot afford the soaring housing prices, wants to bring the distorted housing situation to public light.
“Housing spending plays an increasingly greater role in Chinese consumers’ life. As we know, more than 60 percent of a family’s daily expenses goes to buying or leasing an apartment. In this case, social fairness and government subsidies for the poor is of great importance and urgency,” said Chen.
Volunteers reported to Sina that 51.23% of bought flats in about 100 Shanghai property projects were empty. This was lower than the rate in Beijing (65.6%) and Hainan (over 70%), but some warned that the method was unreliable. Media outlets reported a week ago that developers would sometimes leave vacant houses lit up at night to give the illusion that people live there.
Besides leading to calls for more accurate information about housing stock, the issue of vacant apartments has also dredged up worries about China’s real estate bubble. As Andy Xie, an analyst in Shanghai, argues:
Property bubbles can be divided into two kinds—quantity bubbles (too much supply) and price bubbles (too expensive). China, however, is facing a combination of the two.
The Chinese property bubble is different from that of other countries since it has a huge supply while prices also run high…
What happened to the U.S. economy now serves as a good lesson for Chinese decision makers. Policymakers should act now to alleviate the housing problem, since a crash in the real estate industry could bring down the whole economy. In my opinion, it is very likely the Chinese property market would collapse much like the United States did in 2008.
As much as all of us aren’t wishing for a crash, at least housing might get a little more affordable, eh Chinese netizens?