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| Listings for residential properties for sale in China |
More than one in five homes in China's urban areas is vacant, and a current housing-price correction is putting additional pressure on the owners of such empty properties. According to a nationwide survey, 49 Million Sold but Vacant Units. The vacancy rate of sold residential homes in urban areas reached 22.4% in 2013, or 49 million homes, up from 20.6% in 2011.
As of August 2013, the amount of outstanding mortgage loans on vacant homes in China reached $674.33 billion. In addition to the 49 million sold but vacant units, the survey estimated that China has 3.5 million homes that remain unsold. Vacant homes are more likely to add to homeowners' burden and cause them to suffer a financial loss. If home prices fall by 30%, 11.2% of the vacant homes would be underwater on their mortgages, a sustained price falls could result in more homeowners holding mortgages that exceed the value of their homes.
Analysts and investors have raised concerns about the massive rows of empty apartments in seemingly every Chinese city, the result of rapid development fueled by easy credit and authorities' desire for growth. The country's property sector is an important driver of growth, with economists estimating that real estate and related industries, such as steel and cement, account for 16% to 25% of GDP.
Analysts and investors have raised concerns about the massive rows of empty apartments in seemingly every Chinese city, the result of rapid development fueled by easy credit and authorities' desire for growth. The country's property sector is an important driver of growth, with economists estimating that real estate and related industries, such as steel and cement, account for 16% to 25% of GDP.