As if there were not enough unoccupied flats, more social housing to come7 February, 2012, 15:29. Posted by Zarathustra
Tags: Real Estate, Social housing
Last year, Chinese government targeted to start construction for 10 million of “social housing”, or affordable housing for lower-income people. The target was met, because the definition of “housing start” could be as liberal as digging a hole on the ground and nothing else, particularly as tightening last year made it harder for local governments to get funding to meet the target, that was the best they could do. And despite the fact that they are meant to be built for lower-income people, some local people jokingly told us that those flats are for those who have already got a flat, and one would vaguely remember that some blokes who actually have those flats drove BMW.
Anyway, despite that fact that there are more empty flats than one could have ever imagined everywhere, the social housing programme will surely show no signs of slowing (i.e. more hole digging or what?). Although new housing start may be slowing, there will be around 18 million flats under construction according to Sina. Funding would be, once again, the big problem, and the Ministry of Finance will allow more sources of financing, including bond issuances and property taxes, among other things.
As long as funding can be solved, surely you will not need to worry about whether they can build that many buildings, because Chinese’ building technology is so advanced that Chinese can build a 15-story thing in 6 days, and surely that will be helpful for the GDP growth.
At this rate of construction, you will certainly burst any property bubble.