How Much Housing Inventory Is There Really? Estimates Range from 700 M SQM to 14,000 M

Official peg the outstanding real estate inventory at 700 million square meters in China, but one analyst has thrown out a shock estimate of 14 billion square meters.
On January 20, the 2015 NBS commercial housing for sale by area reported the first break of the "700 million" mark, reaching 718 million square meters. Zhong Wei pointed out, it is now accustomed to summarize the current 700 million square meters of property inventories, which seriously underestimates the serious imbalance between supply and demand in the property market facing. "This sale is only 700 million square meters of area, that is unwanted sexual inventory."
Gotta love Google Translate. What she said can be restated as, the 700 million of outstanding inventory is the dregs of the real estate market. This is the property nobody wants, at least at current prices. The inventory figure also doesn't include unfinished and projects yet to break ground.
Experts believe that the National Bureau of Statistics data include only after the completion of unsold existing homes, a large number of construction has not completed, not yet started, and potential stock not included.

Vice president of China Real Estate Research Council of residential Gu Yunchang said the sale area is completed houses, plus still under construction but already started early sales, the total is far more than 600 million square meters.

Shanghai E-House Real Estate Research vice president Yang Hongxu that the property market has become a sore point high inventory current Chinese economy, once recognized the potential inventory data, the number of Chinese property stocks may be doubled.
Here comes the shocker:
Finance columnist Li Yujia (李宇嘉) told China Economic Net reporter that the actual size of the inventory for sale should be based on data from the National Bureau of Statistics, together with already approved for sale but not yet sold 700 million square meters, on top of this, add 71 billion square meters have been approved but not built inventory, 5.61 billion square meters under construction of unsold inventory, China's property market, together these "three large" chunks of the total inventory to be digested comes to over 14 billion square meters.
At least some of that construction will never begin or never finish.
If we consider only a commercial destocking how much pressure? Zhong Wei believes that full-year 2015 sales of approximately 1.3 billion square meters of housing, new construction may also be slightly more than this, so reduction of real estate inventory in 2015 made little headway. Taking into account the 2015 70 cities survey, excepting the Northeast (rust belt), prices rose in most cities, so sales speed is quite difficult; the only way to reduce inventory is to limit new construction and land acquisition.
In other words, China has to further reduce real estate investment if it hopes to turn the corner on real estate inventory.
Zhong noted that the current inventory is equal to 2 years of under construction housing plus three-months of sales can generally be said to be reasonable. If every month the inventory falls about 120 million square meters, if the stock fell to about 3.3 billion square meters, the property market can be said to have been normalized. Sales are 1.4 billion square meters per year, the new construction is projected to be not higher than 10 billion square meters per year, China's property market inventory reduction process will take about four years, basically back to normal after 2019.
Li Yujia is obviously more pessimistic:
In Li Yujia's opinion, the current property market inventory digestion will take longer. He said that even if at the highest sales rate in history, 2013's 1.3 billion square meters, it will take more than 10 years before the inventory reduction is completed. And this is achieved without increasing the future supply of new land and maintaining strong sales momentum.
iFeng: 中国楼市库存知多少:7亿?50亿?140亿?

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