On this land that was once bustling with activity, only empty high-rise buildings now remain, as if silently narrating the rise and fall of an era. The phenomenon we often refer to as "ghost cities" aptly reflects the current predicament of China's real estate market.
Behind the accelerated urbanization process in China, the real estate markets in some cities have fallen into a severe imbalance of supply and demand, leading to the so-called "ghost city" phenomenon. According to data from the National Bureau of Statistics, as of the first half of 2024, national real estate development investment decreased by 10.1% year-on-year, and the area of new residential construction started plummeted by 23.7%. These figures reveal the current sluggish state of the real estate market, especially in second and third-tier cities where the economy has not fully taken off, with vacant high-rise buildings standing tall and vacancy rates reaching as high as 30%.
From the perspective of urbanization, developers have blindly expanded against the backdrop of rapid economic development, neglecting the actual market demand. Consequently, some projects have become unprofitable, and the market has gradually exposed the risk of oversupply. Statistics show that by the end of 2023, the national unsold commercial housing area increased by 15.2% year-on-year, with the unsold residential area growing by 23.5%. Such an imbalance between supply and demand has led to an intensification of the "empty city" phenomenon in some regions.
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The uneven distribution of resources has also exacerbated this issue. A large amount of capital and labor are concentrated in first-tier cities, creating a "siphon effect," while newly built urban areas are on the periphery of economic development and struggle to integrate into the overall urban planning. Experts point out that the government should adopt a "city-specific policy" strategy, using macroeconomic regulation and targeted support policies to balance the development of various regions.
Amid the severe trials faced by China's real estate market, public reactions are becoming increasingly intense, with discussions on social media about developers' blind expansion and the government's "performance projects" heating up.
Netizens have expressed that behind this phenomenon lies a serious disregard for actual needs. The comment by netizen @LaoWangNotWang has resonated widely, and his mention of "performance projects" prompts reflection: In the frenzy of economic development, how should the relationship between the government and the market be balanced?
According to the latest data for 2024, the vacancy rate in some Chinese cities has reached as high as 30%, a shocking figure that provides strong evidence for public skepticism about the real estate market. People are increasingly realizing that blind urbanization and the construction of high-rise buildings do not solve housing issues but may instead exacerbate the waste of resources. As the government begins to strengthen regulation, various policies such as "city-specific policy" have been proposed in hopes of balancing resource distribution across different regions.At the same time, the mentality of homebuyers is also undergoing a subtle change. The past notion that "buying a house is making a profit" is gradually being shattered by reality. Surveys show that 70% of homebuyers have started to choose renting or waiting and watching, demonstrating a more rational investment attitude. This not only exerts new pressure on the market but also prompts real estate developers to rethink their development models. New market mechanisms have begun to emerge, and government regulatory measures have become more flexible to adapt to the ever-changing market demands.
In this process, the voice of the public is particularly important. Regarding the blind expansion of developers and the imbalance of government policies, the public is not just a bystander; their opinions and feedback are becoming an important reference for policy adjustments. Only by truly listening to public opinion can the market's healthy development be more effectively promoted. Facing the future, finding a balance between development and actual demand is the core issue that the real estate market needs to address.
To effectively respond to the "ghost city" phenomenon, the government has introduced a series of regulatory measures such as purchase restrictions, credit limits, and "ensuring project completion" policies.
The introduction of these policies is not only a response to the current market situation but, more importantly, aims to stabilize the economy and meet the basic housing needs of the people. Data indicates that since the implementation of these policies, there have been signs of improvement in the real estate markets of some cities. The transaction volume of houses increased by 18% at the beginning of 2024, which shows that market confidence is gradually being regained.
In the face of market challenges, everyone is actively seeking ways to save themselves. As the market environment changes, more and more developers are starting to change direction and venture into new areas such as long-term rental apartments and cultural tourism real estate.
A well-known developer announced plans to invest 30% of its funds into long-term rental apartments to cope with current market pressures. However, small developers still face a tough time, with frequent disruptions in their cash flow, and many projects are at risk of being abandoned.In the future, how the government and the market can find a balance will remain an unresolved issue. As the market environment becomes more complex, relying solely on government policies to regulate will not be able to solve all problems. Experts suggest that the self-regulation of the market and the macro-management of the government need to be more closely integrated in order to achieve sustainable development.
The "ghost city" phenomenon is not only a problem of the real estate market but also a microcosm of the entire socio-economic structure.