Unsold housing stock falling fast in smaller Chinese cities
More than 40pc of smaller cities saw their housing investories drop to 12 months or below at the end of 2016
Smaller cities are increasingly driving China’s property market growth as the massive housing inventories that had built up gradually start to fall in many parts of the country, according to the latest figures from analysts at UBS.
With the housing glut easing this year, developers focusing on lesser-known places have seen shares surge on expectations they will be the top gainers amid the sales rebound.
China has for years suffering from a polarised housing market, as sellers struggle to fill apartments built in lower-tier cities despite sky-high home prices in metropolitans such as Beijing, Shanghai and Shenzhen.
After a sharp price rise last year, the authorities in more than 20 big cities imposed cooling measures, while the central government repeatedly vowed to cut excessive inventory in the third- and fourth-tier cities.
The efforts seem to be working. More than 40 per cent of such smaller cities saw their housing investories drop to12 months or below at the end of 2016, meaning the existing units are expected to be sold out within a year, according to a UBS analysis.
