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Zhu Rongji’s Son: China Has Overbuilt Houses for 300 Million People

Zhu Yunlai (Levin Zhu), son of former Chinese Premier Zhu Rongji, is an outspoken banker in China. He recently commented on China’s housing market.

“Actually according to the Statistics Bureau, if you add each year’s numbers together, China’s current total housing capacity can supply 1 billion people, at an average rate of 30 square meters per person. Counting even people living in small towns, China has only 700 million urban dwellers. That means there is a 300 million over-capacity.”

“The nationwide average housing price is 7,000 yuan (US $1,000) per square meter. The average income for urban residents is 30,000 yuan per year.  Taking out expenses and taxes, 10,000 yuan can be used for house payments. The housing price has way exceeded the general public’s purchasing capability.”

“Then why are houses so expensive? It is because of the financial factor. China has issued 160 trillion yuan. The number is still rising. So the housing price for sure is rising – that’s called asset inflation.”

“People eventually will realize that even if you have the money to buy a property, you won’t be able to sell it later because the general public, that is those who are really in need of a house, cannot afford one. So the housing assets will not increase in value and people may be forced to sell at a loss.”

Source: Sina, June 25, 2017
http://cj.sina.com.cn/article/detail/2192180454/296831?column=realty&ch=9

 

 

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