A glut of empty private sector housing has emerged in China during the first four months of this year, the National Bureau of Statistics reported yesterday.
During the January-April period, the number of unlet and unsold properties grew 9.6 percent compared to the same period last year.
The growth rate was much higher than the 6.4 percent growth witnessed during the same period last year, the bureau said.
It did not, however, provide exact figures for the number of empty homes in the sector, often referred to as commercial housing in China.
But experts from the China Real Estate Association estimate it may be as much as 130 million square meters, accounting for about 19 percent of the country's total.
Jia Hai, an official with the National Bureau of Statistics, said the growing number of empty properties is attributable mainly to the large numbers of new homes coming onto the market.
During the first four months, construction was completed on a total of 42.8 million square meters of such properties, a year-on-year increase of 37.4 percent.
New construction was also begun on 146 million square meters during the period, an increase of 31.7 percent.
Top officials, including former Premier Zhu Rongji, have warned that China must be wary of real estate bubbles and the corresponding financial risks.
But China's real estate investment grew year-on-year by 33.5 percent to 198 billion yuan (US$24.9 billion) during the first four months.
Jia said slow sales, due partly to the SARS outbreak, would also result in more vacant spaces.
But it was still too early to say how much impact SARS will have on sales and the industry as a whole, he said.
Li Xueyan, chief analyst with Beijing BA Consulting, a leading real estate adviser in the capital, said the sector has inevitably been influenced by the disease.
However, influence should not be greater than that on other industries, she said.
Since the outbreak of SARS, some of Beijing's real estate developers reported that the number of people viewing and buying housing has plummeted by 80 percent.
"But that might be temporary," said Li.
Due to China's robust economic growth, housing demand could be maintained over the long term, she added.
In recent years, the real estate sector has become one of China's core industries, contributing 1.5 to 2 percentage points of the overall growth rate.
Susan Zhang, associate director of Jones Lang LaSalle's Beijing office, said SARS will have its greatest impact in the field of property investment, rather than individual housing.
(China Daily May 22, 2003)