I'm interested in this problem, so I'll dig into it here.

500 million? From what I can see, it's 50 million here:

https://www.scmp.com/business/china-business/article/2172413...

Elsewhere I see 65 million

https://asia.nikkei.com/Spotlight/The-Big-Story/China-s-hous...

So maybe you added a zero accidentally?

Either way, the 50 million figure is supposed to be 1/5 of all urban homes. Let's see if that checks out.

64% of China is urbanized according to https://www.statista.com/statistics/270162/urbanization-in-c...

So they estimate 840 million urbanized and a fifth of that is 50 million? That means 250 million homes for the 840 million people. That would be 3.4 people per home, on average.

Statista says Chinese household size is 2.92

https://www.statista.com/statistics/278697/average-size-of-h...

So in that case, with 840m urban pop., we'd expect 288 million homes, urbanized so a fifth would be 58 million, about half-way between 50 and 68. My guess is that they did a sample and found about a fifth unoccupied, rather than trying to count all unoccupied homes.

So let's ballpark and say 60 million homes.

But if you look at the same urbanization graph from statista, it's climbing at about 1% per year (ignoring the sharp climb from 2019 to 2020). Moreover, household sizes are falling by 0.1 per year. Both of these are sources of demand for more homes -- people moving to cities and moving out of their parents homes to create smaller households.

So together, the growing demand for homes would be the 14 million people from urbanization (1%) corresponding to ~4.8 million new homes, and decreasing household sizes, corresponding to 1.6 million more homes, so 6.4 million homes per year.

But there is also a demand coming from homes being torn down. Let's say homes last for 50 years (assuming not very well built, as China was poor when the oldest homes were built). So they'd need to build ~9.6 million new homes each year just to replace the obsolete old homes.

So now ~16 million homes need to be built each year (assuming my estimates).

Let's see if we can double check that number.

From one of the housing glut articles, we see that 15 million homes are built each year

https://www.businessinsider.com/china-empty-homes-real-estat...

snaps suspenders. Seems like a good enough double-check for back of the envelope calculation. So if we need 15 million per year, a ~60 million supply of empty homes is only 4 years lead.

Let's compare that to the U.S.

We have 17 million empty homes.

https://247wallst.com/housing/2019/09/30/there-are-over-17-m...

Out of a base of 141 million

https://www.statista.com/topics/1618/residential-housing-in-...

And we're building about 300K. So the US ratios of %vacant homes and vacant/annual_production are 12% and 57.

Whereas the Chinese ratio of vacant homes/total and vacant/annual_production is 12% and 4.

Now many of the US vacant homes are vacation homes. But then why can't China also have vacation homes? In other words, it doesn't seem that the Chinese market, in terms of number of vacant homes, is really extreme. I suspect what happened is that a reporter stumbled on a statistic that said 1 out of 5 urban homes were empty, and they freaked out; then the story went viral. There's so much terrible reporting happening now.

The difference seems to boil down to the fact that Chinese use their homes not as second homes but investments, and they leave the home unfurnished (like a concrete box), in the expectation that they will sell it for more later. And if you borrowed to buy the home and are leveraged, then you may be in trouble. But if you didn't, you can turn it into a vacation home. So maybe there is a problem there, but it doesn't seem to be an enormous problem.

But this is me just googling and applying some arithmetic.