“… what impact will banning third-home-purchases on credit have on the world’s second largest economy? If that’s what China is relying on, there are some serious structural issues.” Though I understand the situation is complex, and metrics applied elsewhere may not be applicable in a context like China, here’s some more evidence for the ‘bubble’ crowd: Zhao Xiao, a professor at Beijing University of Science and Technology, estimates that, among home buyers, at least 40-50% are doing so purely for investment purposes. He’s quoted in this article, citing a survey which examined residential energy usage statistics, and concludes that:

• There are at least 65 million empty apartments in 660 cities throughout China.

• This translates into (assuming 100 square meters per apartment) 6.5bn square meters of unused space.

• That’s enough to essentially add three more Shanghais to the country without batting an eyelash.

• The amount of space, the report notes, is equal to 7.7 times the amount of property sold in 2009, and 11.3 times the amount of new space constructed.

If this is accurate, it would seem that orgies of new construction all over the country are merely a drop in the bucket, when examining aggregate, unused space. There’s a good long term argument that this space will be soaked – 65 million units is enough for, say 190 million people, which is about equal to various estimates of China’s long-term floating population of migrants. The question of whether or not they’ve settled within the cities is extremely relevant, in determining how fast this excess space will be used up. There does appear to be considerable retail demand for decent living space, though price currently deters these people from buying into nicer properties. If incomes continue to rise, however, it’s simply a matter of time until there’s a break even point.

That said, the break even point could be a decade from now, and if structural investment does not shift, the housing boom seen in the last decade may very well have represented a tremendous waste of resources.

赵晓表示，根据国家电网利用智能网络在全国660个城市的调查，发现大约6540万套住宅电表读数连续6个月为零。“以每套住宅平均100平方米计算，65.4亿平方米的空置商品房相当于2009年住宅竣工面积的11.3倍，这相当于2009年住宅销售面积的7.7倍，说明中国当前住房空置率远比想象的严重，也说明一些有钱人正用大量资金在房地产市场上兴风作浪，不断激化社会矛盾，炒房大军明显已经成为加剧我国房地产市场疯狂的毒药。”