The Causes of Vacant Housing in China

In recent times there has been a significnat escalation of rapid growth in the housing sector which has led to increases in vacant housing stock in China.At the same time there is a large segment of the population which is forced to live in overcrowded or substandard housing due to their inability to enter the housing market. However, developers continue to construct new housing at a rapid rate, many times disregarding the actual needs of the marketplace. Due to the important role in traditional Chinese society that housing plays, property ownership is a driving force in the Chinese social order. Vacant housing has become a serious concern for many Chinese Government groups, social observers, and economists. The inability of so many Chinese people to participate in the housing market, can lead to profound negative impacts in the future of Chinese society if these problems are not solved. Vacant housing has significant social and environemental impacts which need to be understood.Objectives in this thesis were established to show the causes of the phenomenon of vacant housing in China. Nine hypothesis were developed with the intention of facilitating a better understanding of the problem behind vacant housing.These nine hypothesis were formulated based on a literature review of the causes and effects of vacant housing in various international settings. These international settings were used to formulate the appropriate approach to the Xiamen China case study. The research type is explanatory. A case study research was conducted in Xiamen, being a real estate pioneer development city in China. Primary data was collected by means of in-depth interviews and focus groups. The interview targets and focus groups involved were several relevant key actors, including three groups which are as follows; three categories of developers ,Xiamen Government agencies and individual property homowners. Secondary data was collected by means of desk research through reports, policy documents,journal and online statistic reviews. In my thesis, nine hypothesis were tested and identified for the cause of vacant housing. Several main findings arose from a careful analysis of the data collected from the periods between 2007 and 2011. Key points to support the original idea behind the concept of vacant housing include that there was a critical phase during 2008 where many factors came into play that had a direct effect on the creation of vacant hosuing. These included but were not limited 3 The Causes of Vacant Housing in China: a case study in Xiamen to the availability of low interest rates, easy credit, massive liquidity, government stimulus policies and a general exuberance in the real estate market among Chinese in general.However, since 2010 new government policies have been inacted that have contributed to the creation of more vacant housing. These policies are often an attempt by the government to slow down price increases in housing, yet they have created a domino effect due to an increase in new housing construction and an overstock of properties.