![]() As of the end of the second quarter, Chinese developers owed 33.5 trillion yuan ($5 trillion), or a third of the country's GDP, up more than two-fold from 2015, according to Nomura. ![]() The real estate market has continued to expand because investors, developers and home buyers have generally believed that the sector is too crucial to the economy for the government to allow any significant correction.Ĭhina's property sector is heavily reliant on credit and many developers are struggling under the weight of debt. According to the Chinese central bank, 93.6% of urban households owned homes last year, one of the highest rates in the world. read moreĬhina has about 65 million empty homes, which is equivalent to the total number of households in France and the United Kingdom combined, due to a massive building boom and rampant speculation.īetting on sustained growth, a huge proportion of China's 1.4 billion people - some estimates say about 70% - have money tied up in residential property. The value of nationwide land sales slumped 17.5% in August from a year earlier, according to Reuters calculations using finance ministry data, the biggest slide since February 2020. Property accounts for 40% of the assets owned by Chinese households, according to Macquarie, raising concerns that if the bubble bursts, consumers would feel less wealthy and turn more thrifty, which would hit other sectors of the economy. ![]() Land sales in China account for a third of their revenues, which stood at 27.3 trillion yuan ($4.3 trillion) in 2020, according to Japanese bank Nomura. The sector is the largest contributor to China's gross domestic product (GDP), accounting for more than a quarter when related industries are included, economists say.Ī vast ecosystem of suppliers and service providers has flourished around giant property developers and real estate has played a crucial role in creating jobs and generating cash for local governments. ![]()
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