BEIJING/HONG KONG (Reuters) -On Thursday, KE Holdings, which owns a Chinese property think tank, apologized for causing a “heated public discussion” with a report about rising housing vacancy rates in China, saying that its assessment may not have been accurate enough.
The apology comes at a time when policymakers are telling banks to give loans to real estate companies and local governments are making it easier to buy a home with less of a down payment. This is because sales and confidence are falling because the economy as a whole is getting worse.
A growing debt crisis in the real estate sector, which makes up a quarter of the second-largest economy in the world, has also made social instability more likely.
The Beike Research Institute released a report on August 5 after conducting a survey. The report warned of an oversupply in China’s property market because there are a lot of empty homes in China’s biggest cities.
The report said that the average housing vacancy rate in 28 major cities is higher than the average rate in the United States, Canada, France, Australia, and Britain, with a vacancy rate of 7% in tier-one cities like Beijing and 12% in tier-two cities.
But in a statement posted on its WeChat account on Thursday, the company said that the way the data was collected was wrong.
“The survey uses the fact that a home has been empty for three straight months as a sign, which doesn’t tell the whole story,” it said.
The company said that some of the problems were that survey response were not all the same, that the samples and procedures weren’t standardized enough, that coverage wasn’t as good, and that some of the data was collected incorrectly.
“We will check with the housing, water, and electricity departments to make sure the data is correct,” it said.
Reports of high vacancy rates could make the already troubled real estate market even worse. Some cash-strapped developers have stopped paying back loans and bonds, and buyers in several cities have stopped paying their mortgages because their homes aren’t finished.
When Reuters asked Beike for more information, he refused. On its official WeChat account, you can no longer find the report.
Zhang Dawei, the head analyst at the real estate company Centaline, said that the government should make the vacancy rate public.
“It is impossible for a private institution to get real data, and such data needs to be released carefully, which can easily cause market panic,” Zhang said.
The financial news site Yicai posted a link to the report on Weibo (NASDAQ:WB) on Tuesday. The post got 56,000 “likes” and 6,017 comments in one day.
Some people said that more needed to be done to get prices down.
One Internet user said, “The real estate market is broken, which is why prices are so high and so many homes are empty.”
Someone else said, “It will be hard to bring people together if prices don’t go down.”
In another Weibo thread with the hashtag “apology from Beike on the high vacancy rate,” which had over 38 million clicks by mid-afternoon, one netizen said, “Beike got a warning from the relevant authorities.”
