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China faces risk of house oversupply
(Xinhua)
Updated: 2006-02-08 16:38
Latest government statistics have revealed that China's real estate sector
has accumulated over 167 million square meters of unused land resources across
the country, an alarming sign of house oversupply, warned a report in Tuesday's
Economic Information Daily.
The unused land, accounting for 53.8 percent of the total purchased by house
developers in the first 11 months of 2005, would be more than enough for the
following year's demand for housing development, according to figures from the
National Bureau of Statistics (NBS).
The NBS statistics also showed the country is confronted with an increasing
number of vacant houses. The floor space of the vacant houses in China stood at
114 million square meters by the end of last November, a year-on-year rise of
14.2 percent.
During the January-November period of 2005, the floor space of the houses
under construction increased year-on-year by 18.5 percent to 149 million square
meters.
"The potential house oversupply is due to a lack of stringent market
admittance and withdrawal mechanisms," said Qian Minze, an expert with the State
Information Center.
"Driven by the high real estate prices and profits, a large number of
companies swarm to the market, including those inferior ones.
"On the other hand, it is difficult to compel the unqualified companies,
which have already existed in the market, to withdraw."
Qian urged the government to take legal and economic measures to tighten
control over the real estate market, so as to ensure the healthy development of
the industry.
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