Beijing: Liu Hong and his parents have four residences spread across various Chinese cities. Three of them are vacant at any given time.
The 36-year-old, who works as an auditor in Shanghai, paid 320,000 yuan (about $47,000) 13 years ago for an apartment in Harbin, the northernmost city in Heilongjiang province. It's only two blocks from her parents' home, which was given to her free of charge by the school her father worked at three decades ago – a practice that was common in mainland China at the time. .
According to Liu, my parents insisted that I find my place because they were convinced that I would eventually return to Harbin and live there or that I might need it to save money before the wedding.
"None of that happened, so my parents now live with me in Shanghai for half a year when they both retired."
After deciding to settle in the city, Liu spent 2.6 million yuan on a two-bedroom apartment in Shanghai during the market boom in 2015.
Between October and April, when both Harbin and Shanghai are very cold, her parents move to Haikou in the southern Chinese province of Hainan, where they have a small holiday home.
“It is difficult to find a tenant or buyer in Harbin. We simply leave our old apartment to sit vacant for long periods of time. Our family alone has two or three houses that are vacant for most of the year, according to the theory, Liu said.
The family situation is by no means unique. Many estimates place the number of vacant apartments in mainland China at millions.
This will probably create problems for China's already volatile housing market as a surplus of vacant homes could drive prices down further.
In its most recent study, the Chinese property think tank Bic Research Institute (BRI) warned that "China has no shortage of homes, sitting very empty, and such high vacancy is risky."
“A large potential supply is represented by vacant homes. When predictions for the housing market turn negative, a significant number of vacant homes will be put on the market, which could add to downward pressure on home prices. .
According to a BRI report published earlier this month, the average vacancy rate in mainland China is 12.1%. This is significantly higher than in the UK, where only 0.9% of homes are vacant, where the figure is 11.1%, and 9.8%, where it is in Australia.
According to a study conducted last year by Ren Zepping, a former economist at the Center for Development Research, that rate translates to about 50 million vacant apartments. There are about 400 million homes on mainland China, according to official figures on the number of homes built since their estimate in 2020.
This staggering figure is almost 16 times the total number of homes in Hong Kong, which includes both occupied and vacant homes.
Capital Economics, a London-based research and consulting company, will place this figure even higher. About 30 million homes on the Chinese mainland were considered unsold as of the previous year, and an additional 100 million homes may have been bought but never occupied.
For Liu and people like him, this is all bad news. As the boom period of the housing market comes to an end, homeowners across China may find it difficult to find tenants for their vacant homes.
According to Sunshine Li, a real estate agent in Nanchang, the provincial capital of east Jiangxi, "some of the vacant homes are leftovers of the warm period between 2016 and 2018 when people flocked to buy homes for investment."
Among the 28 major BRI-monitored cities, Nanchang has the highest percentage of vacant homes, around 5%.
The ranking of cities in the report, in particular, sparked a heated discussion on social media. Nanchang residents reacted angrily on Weibo, China's version of Twitter, saying that their city does not, in fact, have the most empty houses.
Because of the backlash, BRI posted an apology on WeChat at midnight on August 11, saying its research processes may not be "rigorous enough". The BRI also promised to double-check its data with local authorities to produce a more accurate report.
Whatever the differences between specific cities, it is undeniable that there are millions of homes sitting vacant across the country.
Fang He, 26, a middle school teacher, claimed that his family owns a three-story, semi-detached house in the coastal city of Kushan in Jiangsu province, which has been vacant since 2017. It is being saved as an investment for yourself as well as for retirement. residence for his parents.
According to Fang, they make you feel secure, and if there is any [financial] uncertainty, you can trade assets for cash.
She believes that as the only child in the family, she will eventually inherit all four properties, including a 4 million yuan luxury house in Kunshan, which is currently vacant.
In China, real estate is known as xuan tou, or bricks, and over the years, people like Liu and Feng and their families have worshipped at its altar. As a result, home prices have increased 2.5 times just in the last ten years.
No inquiries have been made about our old apartment in Harbin so far this year.
They reasoned that even if they didn't immediately need another home, it would be beneficial to purchase one at any time.
However, now that the housing boom is over, the empty homes are starting to seem less like a blessing.
The Liu family is having trouble selling one of their vacant apartments.
This year, not a single inquiry has been made about our previous residence in Harbin, she claimed.
The Chinese real estate market is dreary.
A total of 21 significant developers, including China Evergrande Group, have fallen behind on their unmanageable debts in the past year. The problems were made worse last month when thousands of homebuyers staged a boycott of mortgages.
Although the central government has repeatedly trotted out enthusiastic promises to stabilise the housing market, confidence in the sector is eroding as a result of the lack of clear and comprehensive bailout measures.
S&P Global Ratings anticipates a drop in national real estate sales of up to a third from 2017 to between 12 and 13 trillion yuan in 2022, with a potential 7% drop in average home prices.
All of this is bad news for anyone looking to sell their vacant properties.
If we are stuck with these apartments for years and have to pay maintenance fees and tax, Liu said, "I am a little concerned that the [vacant units] might become a burden one day."
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