Data released today from Beijing’s municipal bureau of statistics show housing sales in Beijing has plunged 39.4 percent year on year to May, a further sign China’s property market is cooling. Sales of commercial buildings, which include residential and commercial property, slumped 33.6 per cent over the same period.
Today, the Australian Financial Review reported 23.3 per cent of China government-subsidised housing is vacant. The paper reports on data from Professor Gan, the lead researcher on the China Household Financial Survey suggesting there is about 50 million homes vacant in China – a vacancy rate of 22.4 per cent. This is double what the United States had during the sub-prime crisis.
According to a survey conducted by Soufun published last week, total land sales across China fell 45% year on year to May and 19 percent for the month. It reported some cities recorded no land sales at all.
As a result, Iron Ore – a raw material in steel used to build China’s homes and commercial buildings – and Australia’s largest export has been hammered this year. China’s residential property sector absorbs 24 per cent of worldwide steel consumption. The Iron Ore price fell 2.1 per cent last night, plunging through the $90 US metric tonne. Bloomberg reports Iron Ore reserves at China’s ports are up 31 per cent year.
» Beijing housing sales slump 35% – The China Daily, 17th June 2014.
» China’s real-estate market sees land sales plunge – Market Watch, 9th June 2014.
» One-fifth of all China’s subsidised homes are empty – The Australian Financial Review, 17th June 2014.