For an economy facing its slowest economic growth in a quarter century, a 7.7 percent year-on-year rise in new home prices in December would seem to offer China some light at the end of the tunnel.
But the headline number, published by the National Bureau of Statistics on Monday, masks China’s massive property problem – a vast amount of unsold apartments mainly in its smaller cities.
Property prices were rising fast in mega cities like southern Shenzhen, where prices rocketed by nearly 47 percent, Shanghai, up a healthy 15.5 percent, and Beijing, which posted a respectable 8 percent gain over a year ago.
But the recovery that began in October, after 13 months of straight decline, has only spread to just over half the 70 cities captured by official data, leaving others languishing far behind.
Wang Jianlin, China’s richest man and chairman of property and entertainment conglomerate Dalian Wanda Group, said on Monday that it could take four to five years for the market to digest the inventory in tier three and four cities.
China has some 13 million homes vacant – enough to house the families of several small countries – and whittling down the excess is among Chinese policymakers top priorities for 2016.