Chinese property company apologizes for vacancy rate report after public debate

Apartments under construction are pictured from a building at sunset in the Shekou area of ​​Shenzhen, Guangdong province, China November 7, 2021. Picture taken November 7, 2021. REUTERS/David Kirton/File Photo/File Photo

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BEIJING/HONG KONG, Aug 11 (Reuters) – A Chinese property think tank owned by KE Holdings apologized on Thursday for sparking “heated public debate” with its report on rising vacancy rates housing in China, and said his assessment may not be accurate enough.

The apology comes at a time when policymakers are urging banks to lend to property companies and local governments are easing down payment rules for home purchases as sales and confidence plummet amid weak macroeconomics .

A growing debt crisis in the real estate sector, which accounts for a quarter of the world’s second-largest economy, has also increased the risks of social instability. Read more

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The Beike Research Institute released a report on Aug. 5 after conducting a survey warning of oversupply due to high vacancy rates in major Chinese cities.

The report indicates that the average housing vacancy rate in 28 major cities is higher than in the United States, Canada, France, Australia and Great Britain, with a vacancy rate of 7% in tier one cities, including Beijing, and 12% in tier two cities. .

But in a statement posted to his WeChat account on Thursday, he said the methodology used had led to inaccurate data.

“The survey takes as an indicator whether a house has been unoccupied for three consecutive months, which does not fully reflect the real situation,” he said.

Among the issues highlighted, he said there were discrepancies in survey responses, samples and procedures were not standardized enough, coverage was not as comprehensive, and some data had been collected incorrectly.

“We will verify the accuracy of the data with the housing, water and electricity departments,” he said.

The report could worsen sentiment in the struggling real estate market where some cash-strapped developers have defaulted on loans and bond repayments and buyers in several cities have refused to pay their mortgages due to unfinished homes.

Beike declined to provide further comment when contacted by Reuters. The report is no longer available on his official WeChat account.

China does not provide official data on housing vacancy rates, and researchers’ conclusions vary.

The Southwest University of Finance and Economics in Chengdu, Sichuan, said in a 2018 report that the housing vacancy rate in urban areas nationwide in 2017 was 21.4 percent. , compared to 18.4% in 2011. National Bureau of Statistics.

The investment bank China International Capital Corporation Limited in a report estimated a vacancy rate of 12.1% in urban areas in 2017.

It gave the rate for cities, excluding villages, of 9.7%, which was “significantly lower” than mature markets such as the United States and Japan.

Zhang Dawei, chief analyst at real estate agency Centaline, said the vacancy rate should be released by the government.

“It is impossible for a private institution to obtain real data, such data should be released with caution, which easily causes market panic,” Zhang said.

A Tuesday Weibo post by financial media outlet Yicai citing the report showed 56,000 likes and 6,017 comments in one day.

Others have suggested that more needs to be done to bring prices down.

“The real estate market is out of shape, resulting in ridiculously high prices and vacant homes in many places,” commented one netizen.

“If prices don’t go down, it will be hard to raise people’s sense of harmony,” another lamented.

In another thread with the hashtag “Beike’s apologies for high vacancy rate,” which drew more than 38 million clicks by mid-afternoon, one netizen said, “(Beike) received a warning from competent authorities”.

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Reporting by Liangping Gao and Ryan Woo in Beijing and Clare Jim in Hong Kong; Editing by Jacqueline Wong

Our standards: The Thomson Reuters Trust Principles.

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