Recent studies have shown that China’s real estate has a strange phenomenon: people slave to save money for generations to buy a house. Still, the CCP regime continues demolishing properties to keep house prices high.

As the Daily Telegraph reported on Aug. 23, according to researchers from the financial and economic information company Fathom Consulting, about 3 billion square meters (1 sq. m. = 10.76 sq. ft.) of houses in mainland China have been suspended or demolished in recent years. Such a large housing area is enough for 75 million people, more than the total population of the UK.

The article analyzes that the CCP is demolishing some buildings as Xi Jinping’s government seeks to bolster the sluggish real estate market. Videos of new buildings being demolished by dynamiting are regularly circulating on Chinese social media. (video 1) (video 2) (video 3)

Analysts said Beijing adopted a “build, pause, tear, and repeat” strategy. At the same time, officials seek to limit supply to prevent home prices from falling and boost the economy through construction activities.

The article also said that the struggling real estate market has weighed on the Chinese economy, and property developers have been heavily indebted during the crisis. As property builders run out of capital, a growing number of uninhabited “ghost towns” are demolished.

According to Joanna Davies, chief China economist at Fathom Consulting, homes in China take an average of eight years to complete, and the supply is “drip fed into the system.”

She said, “A key policy tool to manipulate supply is to order the mothballing of properties during the construction phase of a project.

“These practices enable the amount of new housing under construction to keep rising—which helps to prop up short-term economic growth and keep a lid on social unrest—without flooding the market and driving down property prices.”

Consumer confidence in China’s property market has collapsed following the debt crisis of some giant developers such as Evergrande.

Davies said that China’s total area of ​​excess housing had reached 10 billion square meters. It seems that China has decided on demolition to reduce the excess.

She analyzed that the number of housing projects that have begun construction in China has exceeded the number of completions for a long time, leading to an increasing number of houses “under construction.”  

But the floor area reported “under construction” in 2021 is significantly lower than the floor area “started minus completed.”

According to her, the only explanation for the disparity is that some of the buildings have been halted and demolished.

On Aug. 22, in response to the real estate crisis, the Central Bank of China reduced the reference interest rate for mortgage loans for households and businesses. China lowered its one-year loan prime rate (LPR) for loans with maturities over five years from 4.45% to 4.3%.

Analysts at S&P estimate that real estate sales in China will shrink by a third this year, which is worse than during the 2008 financial crisis.

The real estate market accounts for about a quarter of China’s GDP.

The outlook for China’s economy has turned gloomy in recent months due to the troubled housing market, said Capital Economics economist Sheana Yue.

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