Guangzhou had 2.25 million square metres of vacant residential property at the end of March, but the city is suffering from a shortage of quality projects, an industry group said.
During March, 788,000 square metres of new housing came onto the market, but demand still outstripped supply, putting pressure on prices, said a vice-president of the Guangdong Real Estate Association, Cai Suisheng .
Mr Cai said the amount of vacant housing had fallen 15 per cent year on year, while the supply of new housing was 530,000 square metres short of the 1.32 million square metres of fresh supply in December.
Mr Cai said the amount of vacant housing in Guangzhou did not help alleviate the demand pressure because these were mainly problem properties that did not attract buyers.
According to the Guangdong Bureau of Statistics, 5.5 million square metres of the total 18.46 million square metres of vacant property in the province had been vacant for more than three years.
Mr Cai said these were projects undertaken during the property bubble of 1992-1993 when people were investing blindly in real estate development. The boom ended when the government moved to rein in the market, causing capital to flow out and leaving many buildings unfinished.
Some properties were sold over the years, but those which were badly designed, had poor facilities or were embroiled in debt disputes were left standing half completed for years. It would take time for the market to digest these properties.
According to the association's latest property market report, average housing prices in Guangzhou rose 17.9 per cent year on year to 5,842 yuan per square metre and were 8.9 per cent higher than in the last quarter of 2005.