Beijing Alone Has 50% More Vacant Housing Than The US

Tyler Durden's picture

Putting some housing things into perspective. From the (less than credible) NAR:

Total housing inventory at the end of April rose 9.5 percent to 2.54 million existing homes available for sale, a seasonal increase which represents a 6.6-month supply at the current sales pace, up from a 6.2-month supply in March.  Listed inventory is 20.6 percent below a year ago when there was a 9.1-month supply; the record for unsold inventory was 4.04 million in July 2007.

Meanwhile, half a world away, from a just released report in Beijing News (google translated):

The Beijing Public Security Bureau Population Administration Department said yesterday that have checked the information of the mobile population 725.5 million, mark the rental housing 1.39 million, checking vacant houses to 3.812 million.

So, broadly speaking: US: 2.5 million available homes; Beijing - one city in China - has 3.8 million??

That is all.

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Zgangsta's picture

All they have to deal is repeal the One Child Per Family policy, and problem solved!

Pladizow's picture

Not surprising as their population is 4X the US.

markmotive's picture

China is the disaster on pg16 that nobody talks about.

hedgeless_horseman's picture



Q: How does one say buyer's market in pinyin?

A: Wi Long Shan Ti.


redpill's picture

Whoah whoah whoah, there is a big difference between NAR homes for sale and vacant housing.  Most of those NAR homes for sale have people living in them. 

A better comparison (although potentially no more statistically trustworthy) would be the Census Vacancy statistics which are compiled quarterly.

See Table 3.  As of 1Q 2012, there were 18.4 million vacant housing units in the US, 4.4 million of them are seasonally vacant, the other 14 million are for rent (3.8 million), for sale (1.6 million, this would be the fraction of the NAR number that is actually vacant), and 7.6 million held off the market by the owners.


The Beijing number is still notable, however.  The equivalent would be the entire Northeast region of the United States, which accounts for about 20% of those vacancy stats (3.6 million total).

Comay Mierda's picture

A Bubber of Ronery Houses

Aziz's picture

Central planning wins again.

kaa1016's picture

Redpill, good job. Like they say, never let the facts get in the way of a good story.

Muppet Pimp's picture

Jim O'Neill told me that for China, with their streamlined central planning authority has nothing to worry about.  The real problem says Jim is the remaining democratic regimes around the world.

BudFox2012's picture

Very true.  In China's mad dash to crank up the internal consumption end of their economy, they are creating some massive bubbles of their own.

cougar_w's picture

Nothing about a housing bubble that cannot be fixed by a bulldozer bubble.

And notice, they employ the same people either way.

Arthor Bearing's picture

Step 1. Build House
Step 2. Destroy House

Repeat until you run out of gasoline and fresh water, then shit your pants. 

fourchan's picture

our bubble is their bubble, our depression will be their depression.

Ruffcut's picture

Just like the heads in DC. "Knock, Knock, ..... nobodies home."

The Big Ching-aso's picture



Ya, but at least we have people not paying mortgages occupying houses that should be vacant.

JPM Hater001's picture

About to be 3X's.  They really like to fight amongst themselves in China.  History shows a great propensity to fracture and this time...aint no wall high enough.

I do have to note it will be interesting to watch China fight China with shit made in China.  That's really going to have some really disappointing moments.

dirtbagger's picture

The real key is housing affordability.  Despite the image that China promotes, there is a huge population that is at or near the poverty level.   One can easily forget this in the showcase cities like Bejing and Shanghai. 

Much of this excess housing was built solely for investment purposes and will remain vacant for years.

Buck Johnson's picture

And that is why they are eyeing Australia, Canada and the US eventually.  They need a place to put their excess population.

antaresteleko's picture

That's nothing. In Spain alone we have more than 3 million empty dwellings...

FYI, Spain's population is less than 48 Million people.

ronaldawg's picture

Bejing is an awesome city- not what you would think for a Communist/Facist country - Also they have incredible hookers.

JPM Hater001's picture

Let's be fair...the nice thing about hookers in Bejing is you dont have to tip them.

Tipping is considered propositioning...

K_I_T_T_Y's picture

At least the hookers are not the in other places...

JeffB's picture

Some things can be fast tracked, but even if everyone got crankin' & they induced labor early, I imagine it would be at least a few years before they'd have burgeoning new families with capital and good jobs looking for housing.



sabra1's picture

if only those homes were in canada!

achmachat's picture

having lived in Beijing for a long time, I can tell you that those numbers surely include small rooms for rent, and places you wouldn't even put your mother in law.

Ruffcut's picture

My mother outlaw is too fat and wouldn't fit.

K_I_T_T_Y's picture

and that most of the property where paid cash upfront....

laomei's picture

No only that, but there is a massive migrant population with numbers that don't quite add up unless you are counting them living in very cramped quarters.  Hard to get any real numbers as no one will ever admit to it as tax is owed on rental income.  Also, vacant untouched is simply worth more than furnished, as there are renovation cost considerations involved.


It is very very very common to snap up properties in cash up front to secure future holdings for parents and for children.  People living in cramped quarters are saving up to buy their own places.  It's not really all that crazy if you fully understand the way things work here.

Muppet Pimp's picture

Can you elaborate on how things work there?  Just curious, because from over here it looks like a big CF.  

OT: What is with the chinese children running around without diapers crapping all over the place, like the floors of retail malls and in the hotel lobby? 

laomei's picture

Most of the generation of childbearing age were not raised in a world of diapers. There's also a weird concept of infant shit and piss being clean.  Why waste money on diapers?  The kid'll figure it out soon enough.


Generally speaking, housing used to essentially be a guaranteed thing that was assigned and rented out for token sums.  That changed when the ability to purchase was introduced as it was believed that it would make housing more efficient.  No one cared at first, then they started jacking up the rents


Eventually, pretty much all of the old company housing was converted to private ownership.  Do remember of course that the company was pretty much your life.  The companies had their fingers in many sectors and was entirely possible to move within the system and change companies with permission.  Housing, food, education, retirement, medical care, all provided by the company.  As housing was assigned, basically you lived surrounded by your coworkers families.


So, back to present day, that "iron rice bowl" has more or less been smashed and it's up to you to make your own and provide for the next generation.  There are no property taxes and the taxes that are being trialed are focused on landlords and the very top.  If you have it paid in full, it's yours as long as it's not illegal construction (and there are always signs of it if you bother to pay attention).  Housing in the right locations opens up massive benefits to your children, especially in terms of schools.  Owning a house is actually a massive asset that has the potential to play a role in hukou changes in the future as well.  Beijing is on the top of the list of desirable hukous and owning property here is seen as a long term investment.

1) Society says you need a house to get married.  Having that ready to go for your kid is a big thing and gives them a huge advantage in getting started in life.  For non-locals, having an extra property or two for parents or relatives to retire in or use as a guest apartment is also a thing to do.

2) Rent can be a new iron rice bowl if done correctly, providing stable income in retirement

3) Investment properties need to be kept barebones.  Apartments here come as concrete shells with subfloor and whatnot.  No one really likes "used" housing when they can get "new" instead.

4) There is a HUGE flow of migrants to the cities from the countryside, many of them intend to stay in the cities and use a combination of personal and family savings to purchase properties.  Having desireable empty units is a big deal.

5) Speculators have effectively been shut out of the market for the time being and the government is actively pushing prices lower.  Most speculators bought prior to the height of the bubble and there is still massive demand, but it's pent up.  There's zero reason to sell any of the stock on hand with the exception of needing quick funds for business ventures.  With the difficulties of acquiring multiple units now, again, it's an asset worth sitting on.

6) Housing is commonly used as a liquid asset in settlements.  Having multiple units to your name is a smart thing to do.


The pricing was definitely a bubble driven by speculation, however the vast vast majority of it is either paid in full, or was purchased with a loan prior to the bubble.  The bubble only really took off after the US screwed the global economy prompting a flight to the housing market for safety.  With the prices now under control the next focus is on driving down the rents.   Yes there are "house slaves" now who are pissy about getting loans on the way down, however the downpayments are much higher than the US requires, all mortgages are full-recourse and proof of ability to make payments is rather strict.  I personally know a few people who got caught, and their reaction to it has been to start side-companies and do some moonlighting for extra cash.  Not extra cash to spend, extra cash to pay off the loans faster.  Despite what some reports may tell you, it's very easy to live here on the cheap, and that's what most people do.

Yes, there are empty units, no it's not really a big issue.  They are vacant because the owner wants them to be vacant, not because the banks seized them and are afraid of making a further mockery of their book valuations that they require for solvancy.

Kiwi Pete's picture

Thanks for that laomei. It's always great to have a first hand perspective.

ffart's picture

So basically "houses" are just monetary units in China? 

OpenThePodBayDoorHAL's picture

I wonder how many China bears (Chanos etc) have never even been there, don't speak the language, and don't have a clue about some of these cultural differences. Thanks for this interesting post.

Not saying I'm a buyer...but maybe it's time to close my AUD shorts...for now, anyway

K_I_T_T_Y's picture

Went to Shanghai for the first time of my life 1 month ago.

I know and understand a little of the chinese culture. I can really confirm that what I saw and what I heard from local people reflects what you say.

I think the biggest advantage of chinese people is that they know that they have to count only on themselves for pension and benefit.

In developed countries like US and Europe, people start to think I am entitled to receive this and that from the government... forget it. You are part of your country. You are financing you own pension fund, your benefits and this of many others.... Of course I think it is correct to help weaker people in the system... but if everybody starts to think that he is entitled to something nobody left to pay it.

In China you may have a problem with the poorer, but everyone knows that it's up to them!

mrktwtch2's picture

well thats not good..but what do you expect from a lying comminist country?? i grew up in the 70's and 80's listening to all the prpaganda about how well the ussr was doing or how japan was going to take over the did that work out??

K_I_T_T_Y's picture

who is communist??? China? Are you sure?

Jreb's picture

No. They are fascists. We are all fascists now.

I think I need to buy a gun's picture

Here is a question....Did they just simply build their infrastructure "with dollars" before the new system comes into play and infrastructure would be more expensive to build. anyone have any thoughts on that.....

ParkAveFlasher's picture

So what you are saying is that the building boom is a pre-inflation hedge to offset the implied future worthlessness of their dollar-denominated bonds.  That's such a good catch.  My thoughts are that the western concept of "home" is 3 bedroom, 2 bath, picket fence, etc. however I would like to know if this report would be better understood if by "home" they meant "built unit".  Meaning cubes arranged in buildings, which in this day and age, can be used for anything imaginable, if partitioned, piped, and/or wired correctly.  The structural differences between an apt complex, a prison, and hive of business and commerce are negligible. 

MachoMan's picture

Like all trades, timing is of importance...  If you build shit quality structures in a quick and haphazard manner that end up crumbling or otherwise deteriorating before the "new system" comes into play, then have you really gained anything?  The trick is to presume that central planning is a failure...  and that central planners misallocate capital... 

The other question is...  why would it be more expensive to build for the world's manufacturing center post collapse of the dollar?  Do they have a shortage of labor or something?  I see no reason to believe that there would be any marginal increase in the cost to build these structures in the future...  in fact, it seems the risk is to the downside.

ParkAveFlasher's picture

China can have a labor shortage if they have an energy shortage, if the petrodollar collapses, or if China oil import payment conduits are thwarted.  All mean lapses in the oil supply that powers the current massive mobilization of manpower about the country. 


LFMayor's picture

Well if they'd quit fucking shooting and running over so many of their citizens with tanks, maybe those god damn houses would start filling up.

Cognitive Dissonance's picture

I bet the Chinese have more outhouses than we do as well.

Modern crap house

LFMayor's picture

no, they just squat on the side of the road and offload.  Isn't that right AnAnon?

JPM Hater001's picture

Actually they squat in the stalls...its really nasty.  You want to find the 4 star toilets.  Those are westernized...

True story had dinner in the Great Hall of the People and they have squat stalls.

I never used one so I cant tell you if there was toilet paper in them or not.