China’s housing glut collides with its shrinking population
Subscribe to enjoy similar stories. China’s real-estate bust left behind tens of millions of empty housing units. Now that historic glut of unoccupied property is colliding with China’s shrinking population, leaving cities stuck with homes they might never be able to fill.
The country could have as many as 90 million empty housing units, according to a tally of economists’ estimates. Assuming three people per household, that’s enough for the entire population of Brazil. Filling those homes would be hard enough even if China’s population were growing, but it’s not.
Because of the country’s one-child policy, it is expected to fall by 204 million people over the next 30 years. “Fundamentally, there are not enough people to fill the homes," said Tianlei Huang, a research fellow at the Peterson Institute for International Economics. Some unused real estate will be bought up and lived in, especially if more government support—which economists have been calling for—convinces Chinese buyers that values will rise again.
Big cities like Beijing, Shanghai and Shenzhen will almost certainly absorb their excess housing, given their dynamic economies and migrant inflows, which have helped keep their populations growing. The problem is much harder to solve in smaller cities, which often have weaker economic prospects and declining populations. In China, researchers informally group cities into tiers, and many of the nearly 340 cities classified as third-, fourth- and fifth-tier—with populations from few hundred thousand to several million people—are struggling economically.
Read more on livemint.com
