China’s inventory of unsold new homes rises 11.2pc in 2015
Housing supply overhang seen stabilising after year of excess inventory increase
China’s inventory of unsold new homes continued to increase last year, even as the government has pledged to help draw down excess stock across the country, the latest data shows.
Unsold inventory was up 11.2 per cent for the year to 452.5 million square metres, increasing 11.6 million square meters in December, according to National Bureau of Statistics data released on Tuesday.
“Though the inventory is still on the way up, the percentage growth slowed down compared to 2014,” said Raymond Ngai, Head of China Property Research at Merrill Lynch (Asia Pacific).
“As land supply and construction starts have dropped for two years in a row, we expect the inventory in 2016 to stabilise at the 450 million sq m level.”
According to Merrill Lynch’s estimates, property stock in 12 of 50 major Chinese cities tracked by the bank are already in short of supply, including big cities such as Beijing, Shanghai and Shenzhen.
“There is no inventory problem in tier-one cities, prices will still go up,” Ngai said.
He added that smaller cities like Suzhou, Zhuhai, Nanjing also have good supply-demand situation, while cities like Haikou, Hohhot and Sanya saw inventory level remain high, or over 20 months, and may face a continuing overhang in coming years.