Chinese officials struggling to complete $300 bln of stalled apartment projects want to flip them into leased units. More inventory is good in the long run but a falling housing market needs more buyers than renters: petesweeneypro
President Xi Jinping has been trying for years to change citizens’ attitudes toward leasing. Most owners still prefer leaving units empty to renting them out. Equity returns from property investments can reach triple digits over time, but renting can hurt resale values given many Chinese people’s distaste for lived-in homes. And because most renters are poor or very young, rental yields in China are some of the lowest in Asia.
As a result the country has enough empty units for roughly 90 million people, estimates Logan Wright of the Rhodium Group. That does not include the 500 million to 600 million square metres of unfinished residential projects by indebted developers who have run out of money. Many of those frustrated investors who have pre-purchased apartments are threatening to stop paying mortgages.
In normal times, converting unused spaces into affordable flats this way would not impact buyer confidence much. But the risk is that prospective Chinese buyers become convinced that home ownership is going to peak sooner than expected, and steer clear. After all, family formation is slowing, and Beijing’s push to make renting a respectable alternative to buying might work.
Dumping state-owned flats onto the leasing market will further depress yields, deterring private corporate investors like China Vanke and more recently, Singapore’s sovereign wealth fund GIC, which are interested in developing residential leasing property. Turning empty flats into affordable spaces is a laudable goal, but there’s no reason to hurry.
Österreich Neuesten Nachrichten, Österreich Schlagzeilen
Similar News:Sie können auch ähnliche Nachrichten wie diese lesen, die wir aus anderen Nachrichtenquellen gesammelt haben.
Samsung's Galaxy Z Flip 3 5G can be yours for a measly $300 with no trade-in right nowLast year's phenomenal Samsung Galaxy Z Flip 3 5G is getting ridiculously cheap with the presumably even better Z Flip 4 right around the corner.
Weiterlesen »
Denver's Rental Licensing Program Off to Slow Start, City Anticipates CrunchThere are an estimated 25,000 properties that must be approved by January 1.
Weiterlesen »
Breakingviews - Alibaba dual play is open sesame to China buyersThere’s a certain magic to governance tweaks that boost market value by $12 billion instantly. Alibaba’s Tuesday announcement that it will upgrade its Hong Kong listing to primary status alongside its New York one did just that with an initial 5% bounce. That paves the way for the $273 billion Chinese e-commerce titan to be included in the trading link between Hong Kong and mainland bourses, allowing investors in Shanghai and Shenzhen their first chance to buy shares directly.
Weiterlesen »
China's Property Sales Are Set to Plunge 30% — Worse Than in 2008, S&P SaysChina’s property sales are set to plunge this year by more than they did during the 2008 financial crisis, according to new estimates from S&P Global Ratings.
Weiterlesen »
TikTok owner ByteDance reportedly pushed pro-China messages in defunct news app | EngadgetTopBuzz employees have also claimed that the app flagged coverage of Hong Kong protests for removal, according to BuzzFeed News..
Weiterlesen »
Breakingviews - Breakingviews: Walmart’s pain will be problem shared widelyWhen Walmart sneezes, America reaches for its N95 mask. The supermarket colossus makes up nearly 10% of all retail sales, excluding cars and car parts, and is also the biggest private U.S. employer, with 1.6 million workers. So after it said on Monday that it would miss its profit targets because customers are rethinking how to spend, the result is a widespread problem.
Weiterlesen »