10-21-2021, 03:40 PM
Evergrande is ‘just the beginning’: Professor says more firms must exit China’s property sector
- China’s real estate sector has to be “substantially smaller” to keep the overall economy healthy and stable, said Li Gan, economics professor at Texas A&M University.
- “We have too big of a risk in the sector. We built too much housing, so the stabilization first has to come [from] trimming the sector,” said Gan.
- Gan estimated that about 20% of China’s housing stock is left vacant, yet developers continue to build millions of new units each year.
![[Image: 106944621-16321765732021-09-20t211900z_8...=740&h=416]](https://image.cnbcfm.com/api/v1/image/106944621-16321765732021-09-20t211900z_814800086_rc2xtp9lbg7o_rtrmadp_0_usa-markets-evergrande.jpeg?v=1632176626&w=740&h=416)
China’s real estate sector has to be “substantially smaller” to keep the overall economy healthy and stable, said a top expert on the Chinese housing market.
“We have too big of a risk in the sector. We built too much housing, so the stabilization first has to come [from] trimming the sector,” Li Gan, an economics professor at Texas A&M University, told CNBC’s “Street Signs Asia” on Wednesday.Gan estimated that about 20% of China’s housing stock is vacant as buyers rack up second and third properties as investments. Even then, developers continue to build millions of new units each year, he said.
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