Built to Win

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All of these factors have led to one symbolic effect of the

housing crisis - China’s "ghost cities." These are huge

urban sprawls with few occupants. The government's lax

controls have led to consumers buying apartments that

serve as secondary or tertiary residences as a store of

value with no intention of ever moving in. However,

combined with limited supply in desirable locations, this in

turn has led to escalating property prices, making these

houses out of budget for the average Chinese citizen.

Consequently, there are an estimated 64 million empty

apartments in China and entire cities populated with only a

handful of residents. This oversupply impacts the real estate

market's stability and the financial health of developers,

who have the tendency to abandon projects midway

when they realise that actual demand is insufficient and

leave residents to live in incomplete housing.

The Chinese government has taken a number of steps to

address the housing crisis and stabilise the market after

seeing how urgent it is to handle the crisis, including:

implementing stricter mortgage lending policies to limit

speculative property purchases, piloting property taxes in

select cities to deter speculative investment and encourage

long-term homeownership, encouraging local governments

to increase the supply of land for residential development to

meet the demand for affordable housing and introducing

tighter regulations on property developers' financing

activities to prevent excessive borrowing and risky

investments.

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