Beijing District Releases Official Housing Vacancy Rates

Beijing's largest district Chaoyang has issued figures showing that a total of 1.33 million square meters of residential space are vacant. Over half of the space has been empty for at least three years.

Among the empty residences, villas and luxury apartments totaled 521,000 square meters, accounting for 39.2 percent of the total and 54.9 percent of homes have remained empty for over three years. Ordinary flats accounted for 18 percent of the empty residential space, according to the report.

But the report failed to make the distinction between unsold housing or the commonly believed unoccupied housing after sales.

With rising fears of an emerging property bubble, market concerns over the housing vacancy rate across China have deepened. However, little official data has been released. The Chaoyang District housing vacancy report is the first of its kind.

According to earlier media reports, 64.5 million urban electricity meters registered zero consumption over a recent, six-month period. But the figures were denied by power companies.

Andy Xie, board member of Rosetta Stone Advisors, said that the huge quantity of empty flats represents speculation in current home purchases. Under normal market conditions, the vacancy rate should be equal to the number of households relocating, times the average transition period, plus newly formed households times the average purchase period, said Xie.

Xie estimated that the vacancy rate for the China's private, commercial housing stock is between 25 and 30 percent, at least double compared to normal market conditions. Xie said the value of the inventory held by speculators probably accounts for around 15 percent of GDP.

According to the Chaoyang district report, from January to July, property investment in the district reached 44.63 billion yuan, up 17 percent year on year. During that period, commercial housing sales totaled 1.45 million square meters, down 57.4 percent year on year.