Big Take China Had a Plan to Rescue Its Housing Market. It’s Not Working
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Dec 17, 2024 Lulu Chen, Bloomberg's Asia finance editor, discusses the ongoing crisis in China's housing market. She highlights the staggering number of vacant apartments and the struggles of developers amid financial woes. Focusing on Zhengzhou, she examines the government's bold strategies for reviving the market, including buying unsold properties for affordable housing. Despite these attempts, persistent challenges threaten to undermine these efforts. The conversation raises concerns over the potential impact on China's economic stability if the situation doesn't improve.
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Zhengzhou: Ground Zero
- Zhengzhou, home to the world's largest iPhone factory, became ground zero for China's housing crisis.
- It was at the center of mortgage boycotts, where people refused to pay because developers couldn't finish construction.
Overbuilding in Zhengzhou
- Zhengzhou's urban area more than doubled, but its population grew by less than 50% in the decade through 2020.
- Overambition and overbuilding, mirroring hundreds of other Chinese cities, led to a property bubble.
Government Intervention
- Zhengzhou's government implemented various strategies, including loans to developers and subsidies for homeowners.
- They also purchased over 100,000 unsold units, converting them into affordable housing for sale or rent.