Table of Contents
How many unsold properties does China have?
30 million unsold properties
Mark Williams, chief Asia economist at Capital Economics, estimates that China still has about 30 million unsold properties, which could house 80 million people.
How big is China’s real estate market?
The Chinese property market is already twice the size of the US residential market and in 2019 was worth $52 trillion.
Is there a housing market bubble in China?
To answer the question if China has a housing market bubble, we first need to define what a bubble actually is. An asset bubble arises when asset prices (in our case house prices) start to deviate from the fundamental price component. This means that: where p is the asset price, f the fundamental component and b the bubble component.
Why are house prices rising so fast in China?
A third contributor to the fast increase in house prices are the limited investment opportunities. As capital movements are under heavy scrutiny in China, there are only three options for money to generate revenue: savings deposits, the stock market and the property market.
How much does a house cost in China?
Since the beginning of 2015, house prices have been rising sharply, with a particular acceleration in H1 2016 in tier 1 cities such as Shanghai and Shenzhen (Figure 1). [1] Indeed, in September 2016, property in Shanghai with an average floor size of 100 m2 will cost you USD675,000, and even amounts to a staggering USD825,000 in Shenzhen.
Are real estate prices in China Sustainable?
One could also argue that the high prices rises are justified by economic fundamentals, such as the continuing rate of urbanisation, rising disposable income, and cultural values that favour property. Glaeser et al. (2016) recently argue that the strong level of demand for real estate in China might suggest that current prices are sustainable.