China's real estate crisis deepens as pre-sold homes exceed 48M

(MENAFN) A recent report reveals that China has sold at least 48 million homes before their completion, highlighting the persistent severity of the country’s Real estate crisis. This staggering number, compiled from pre-sale data spanning from 2015 to the first half of this year, exceeds the total housing stock in Germany as of 2021. The data underscores a growing concern for real estate developers, who now face the risk of diminished revenues as potential buyers shift their preferences. Increasingly, individuals are moving away from purchasing pre-sold properties and are opting instead for completed or existing homes.

According to a news agency Intelligence, the volume of homes completed from 2000 through the first half of this year fell by 8.4 billion square meters, or 90 billion square feet, amounting to roughly 1 percent of the total sales. The rate of non-completion of pre-sold homes has surged, climbing from an average of 17 percent of annual sales before 2015 to a staggering 47 percent between 2015 and 2023. This rise indicates a critical issue in meeting the anticipated housing supply, exacerbating the broader real estate crisis.

Furthermore, there is a notable shift in buyer behavior in China’s housing market. For the first time last year, the sale of existing homes in terms of square footage surpassed that of new homes. In the first half of this year, completed homes constituted 27 percent of new sales, a significant increase from just 10 percent in all of 2021. This shift reflects a changing market dynamic where buyers increasingly prefer completed properties over those still under construction. 

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