On the outskirts of the Chinese city of Nanjing, towering concrete pillar-like apartment buildings rise into the gray sky. At first glance, they reflect the explosive growth of China’s construction industry, which in 2011-2013 consumed more cement than the US consumed in the entire 20th century. However, when one looks more closely one finds that these are the remains of a disaster and not the symbol of a magnificent development. There is no light on in any of the buildings and most have neither windows nor doors.
Explaining many buyers of these apartments, their views converge on how the builders stopped work in 2019 because “the contractor ran out of money”. As they all tearfully explain, they deposited their life savings in one of the apartments in these apartment buildings, as the contractor promised modern apartments, close to the shopping center and with easy access to medical care services. For most it was their dream of retirement, for others it was a new beginning in a new city, but as all the “victims” of this situation point out, “they didn’t get anything out of it” as five years have passed since the day they they bought their apartments and their apartments are not finished. And they are not the only ones, because “unfortunately the same is happening all over China.”
Across the country, from the city of Guilin in the south to Dalian in the Chinese North, countless property buyers have sunk their life savings into apartments that were never completed. Besides, in the city of Nanjing, a hotel, an office building, a museum, and even a tower have remained unfinished for years. In a suburb of the northeastern city of Shenyang, an entire neighborhood of 260 European-style villas was left unfinished just two years after construction began. Today the area is occupied by farmers who cultivate their crops on the paths to the neighborhood with the villas and raise their animals in the spaces between the villas.
And in the meantime, thousands of completed homes remain empty across China in so-called “ghost towns.” In 2017, a count was made and it emerged that 65 million houses remained empty, 1/5 of all the houses in China. In September, the deputy director of the statistics agency, He Keng, admitted that there were more empty houses than would be needed to house China’s 1.4 billion citizens. Local authorities tried many gimmicks to get the surplus housing available: they lifted all restrictions on housing purchases, offered buyers perks such as cheap new cars, smart phones and gold bars, and more. But these measures did not work because they do not touch the core of the problem.
The problem is the explosive building activity that occurred in China in the late 2000s, when a feverish credit expansion built entire “ghost cities” with millions of homes and a huge housing surplus amid weak demand in the country. And as if that wasn’t enough, in the decade 2004-2014 housing prices doubled and the real estate sector came to account for 30% of China’s GDP.
