10. United Nations
Seasonal
vacancy
Vacation
Seasonal
Others
Non Seasonal
vacancy
The second house
For rent
For sale
For demolition
others
For Rent and For sale Yes for all countries
Vacation/seasonal
All countries except
Germany and Spain
The second house
All countries except
Germany and Spain
For demolition/
remodeling
All countries (including
Japan) except US
Not for living purposes
(offices, warehouses etc)
US: no
Under construction
Japan: yes
US: No
How to define a vacant house?
11. Shares Contributions Units (10k)
Vacation or seasonal 2.70% 0.63% 149
Long term vacant 29.00% 6.61% 1576
Occasional use 10.40% 2.38% 567
Weekend use 2.10% 0.48% 114
Work or schooling 7.00% 1.59% 378
Second houses by owner 11.70% 2.67% 637
Temporarily used by a family member 12.10% 2.75% 657
sum 17.1% 4078
Long-term used by another family member 2.90% 0.66% 158
Used by friends and relatives 6.40% 1.46% 348
Not ready for living 15.70% 3.58% 853
Not yet remodeled or in remodeling 11.80% 2.69% 641
Under construction 3.70% 0.85% 203
To be demolished 0.20% 0.04% 9
Vacancy rates in urban China
12. Vacancy rates
Number of vacant units
(in millions)
Current 22.8% 54.4
Japan comparable 20.7% 49.3
Most EU country comparable 20.0% 47.3
US comparable 17.7% 38.8
Different calculation of vacancy rates
17. Vacancy rates from new purchases are rising
33.6%
23.2%
12.6%
10.4%
12.5%
16.7%
57.2%
28.1%
16.3%
13.1% 12.9% 13.6%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
≤2 years 3-5 years 6-10 years 11-15 years 16-20 years ≥ 21 years
2013 2015
18. Factors related to vacant housing Marginal effect
If income doubled + 0.6 percentage points
Head one more year of education + 0.6 percentage points
With unmarried young men + 2.2 percentage points
Own businesses + 11.2 percentage points
High risk-taking altitude + 5.3 percentage points
House price rental ratio doubles + 6.1 percentage points
First house yields a double return + 0.2 percentage points
Urbanization rate increases by 10 percentage points - 2.6 percentage points
Why households own vacant units
21. The mystery of the vacancy rate
Most developers/government officials/researchers may disagree:
Between 2000 and 2010, about 70 million additional families in the city.
From 2000 to 2013: net increase 70 million units of housing
The aggregate housing demand/supply in urban China are roughly
balanced.
Where to find 50 million vacant units?
Completed new construction 10.4 billion sq meters
Demolition and reallocation 3 billion sq meters
Net increase 7.04 billion square meters
23. 23
Urbanization in general
Many researchers would equalize urbanization as migrants who leave their rural
homes to go to urban areas to work and to live.
In fact, urbanization in China is quite complicated.
Some changed their Hukou from rural to non-rural.
Some relocated to urban areas.
Some never moved but their areas are turned into urban areas.
24. Urban
residents
Rural residents
Non rural
Hukou
Rural
Hukou
Rural to Urban
Original Nonrural
Hukou
Land
acquisition,
house
demolition
Education,
Employment
buy houses
Rural
Hukou
Nonrural
Hukou
0.9%
10 mil
8.0%
110 mil
Redefined
Migrants
Relocating
Migrants
11.1%
150 mil
9.1%
125 mil
40.2%
560 mil
2.4%
30 mil
28.4%
390 mil
Data Source: CHFS
25. 25
Variables
Overall
demand
Rigid
demand
Upgrading
demand
Redefined migrants
(in percentage points)
-10.7 -8.1
No
difference
Relocating migrants
(in percentage points)
-7.6 No difference -4.7
Redefined migrants have less housing demand
Rigid demand: those who don’t have an apartment in the city of their living and grown-
ups who live with their parents.
Upgrading demand: 20-year old apartments
26. There are more Redefined Migrants than Relocating Migrants.
Treating these two types of migrants the same lead to a substantial
overestimate of housing demand.
Misunderstanding urbanization is likely a cause of 38 million
overbuilt units of commercial housing in China.
26
Summary
27. 27
Restimating urbanization rates in China
How an area is reclassified to urban: connectivity
An administrative village is often consisted of 8 natural villages.
If the village center is connected to a town center:
A connecting road is built
Along the connecting road, most are non-farm land or buildings.
The whole administrative village is reclassified as an urban area.
28. CHFS’ corrections on urbanization rates
Data sources:CHFS, NBS and local statistical bulletins
56.1
68.7
51.2
66.5
57
47.7
65.8
60.9
5.8
11.1 10.7 8.9 8.6 8.2 5.7 4.2
0
10
20
30
40
50
60
70
80
National Guangdong Hebei Jiangsu Sandong Sichuan Zhejiang Chongqing
Urbanization rates and CHFS correction
NBS Urbanization Rate Correction