US media: Chinese homeowners are far less wealthy than they think.

US media: Chinese homeowners are far less wealthy than they think. According to "Reference News", American media believe that there are many empty houses in Chinese cities, where people live in...

The title of the October 28 article on the US "Forbes" biweekly website: In China, there is no city without terrible tracts of empty houses.

In China, reality and economic analysis seem too far apart. But given the confusion within the Chinese government between economic data and investment promotion, divisions over something as simple as whether the economy is growing may be inevitable.

The Wall Street Journal wrote in a recent report: "There is currently a shortage of housing supply in big cities like Beijing and Shanghai, which has caused real estate prices to rise rapidly." And Reuters wrote this sentence: "China needs more housing." For some of us, this is almost incomprehensible. What we saw and heard was nothing like that.

I have been traveling non-stop throughout China for the past two years and I can say that I have never seen a city, town or village without large tracts of empty houses. A colleague who has traveled about 1,500 kilometers twice said that there was never a time when he saw empty houses. To the north, Manzhouli, on the border with Siberia, decided to become a tourist destination and thousands of empty villas were built. In the south, a video taken by a colleague in the mountains of Yunnan showed empty high-rise buildings for 15 consecutive minutes. In Beijing's South Fourth Ring Road and Shanghai's Pudong and Xuhui districts, there are also clusters of communities that are comparable to ghost towns.

According to a 2010 Chinese government report, China's home ownership rate was close to 90% at that time. The world average is 63% and the United States is 65%. The report also pointed out that 15% of Chinese people own more than one property.

In general, the smaller the city, the higher the proportion of multiple housing units. In a medium-sized city in Hebei Province, a local developer said the home ownership rate there is as high as 200%. A developer in Jinzhou, Liaoning, said at least half of the city's population owns multiple housing units. White-collar workers in many cities, especially those in banking, finance and real estate industries, usually own four or five houses.

Right now, there is a serious oversupply of housing. House prices are also converging, ranging from RMB 5,000 to RMB 10,000 per square meter, depending on the luxury of the house, but it has nothing to do with the city or the local average income. Housing prices in a small, poor city in Hebei reach 10,000 yuan per square meter, which is similar to housing prices in relatively wealthy cities such as Shenyang and Harbin.

This does not mean that housing has become a new tradable commodity in China, like watches and jewelry. People buy homes and often leave them empty because renting out devalues ​​the home.

The problem is that most homeowners have no idea that the property they are sitting on is simply not worth the asking price. So they are nowhere near as wealthy as they think they are.