Even 1.4 billion people can’t fill all of China’s vacant homes, ex-official admits

By CNN

In a stunning revelation that has sent shockwaves through China's property market, a respected former official has exposed a housing surplus so vast that even the nation's staggering population of 1.4 billion cannot fill it. This revelation serves as a stark reminder of the formidable challenges plaguing China's real estate sector, stemming from the catastrophic 2021 default crisis instigated by China Evergrande Group.

Historically hailed as the linchpin of the Chinese economy, the property market began its descent into turmoil following Evergrande's debt default and intensified with the Chinese government's crackdown on excessive borrowing. In a grim twist of fate, prominent developers like Country Garden Holdings continue to hover perilously close to default, perpetuating a climate of uncertainty that has stifled prospective homebuyers.

The most recent data from the National Bureau of Statistics (NBS), as of the end of August, paints an alarming picture. An astonishing 648 million square meters (equivalent to 7 billion square feet) of unsold residential floor space now looms over China. To provide perspective, this vast surplus translates to roughly 7.2 million homes, each of an average size of 90 square meters (970 square feet), according to calculations by Reuters.

Yet, this staggering figure only scratches the surface of China's housing glut. It does not factor in the residential projects that have been sold but remain dormant due to financial constraints, nor does it encompass the multitude of homes snapped up by speculators during the 2016 market boom that remain eerily vacant. Experts contend that these unoccupied properties represent the lion's share of the problem.

During a recent forum in Dongguan, He Keng, an 81-year-old former deputy head of the statistics bureau, dared to question the extent of this crisis: "How many vacant homes are there now? Each expert provides a drastically different number, with some asserting that the current number of vacant homes could accommodate a staggering 3 billion people." He went on to emphasize, "While that estimate may be an exaggeration, it is abundantly clear that even China's population of 1.4 billion may not be sufficient to fill this void."

This candid assessment of the property market starkly contrasts with the official narrative portraying China's economic resilience. The Chinese government has consistently brushed aside predictions of an impending economic collapse. A foreign ministry spokesperson reiterated this position at a recent press conference, stating, "Despite the intermittent predictions of China's economic downfall, what has truly crumbled is the rhetoric, not China's robust economy."

As the debate surrounding the gravity of China's housing crisis rages on, the world watches with bated breath to see how both the government and the property sector will grapple with this monumental surplus of vacant homes. This issue carries significant implications for the world's second-largest economy and its ability to maintain stability and growth amidst this property market maelstrom.