Photo shows factories and residential buildings in Hebei Province, early December, 2015. (Photo: China News Service/Zhang Hao)
(ECNS) -- As much as 80 percent of China's large and medium-sized cities are facing an oversupply of homes in the next three years, according to a report released Thursday.
The report by Tohead Investment and Consulting Co in Shanghai analyzed data from 35 first- and second-tier cities, including Beijing, Shenzhen, Guangzhou and Taiyuan.
The report estimated the supply and demand ratio as below 1.1 in seven cities – Shenzhen, Fuzhou, Shanghai, Hefei, Shijiazhuang, Guangzhou and Beijing, meaning that only 20 percent are at the "rational" range of real estate development.
Zhang Renyuan, president of Tohead, says the analysis takes into consideration new homes to be built in the next three years, as well as those unsold by the end of 2014.
Dalian in Northeast China's Liaoning province faces the most abundant supply, with the indicator reaching 7.18 in comparison to demand, followed by Shenyang (4.32) and Changchun (3.27).
Zhang also says many big cities will have to deal with the mounting inventory in three years, and investment opportunities only exist in first-tier cities with a low ratio.
Recovery in China's real estate sector slowed in October, as fewer cities reported price increases, mainly due to weak demand and a supply glut, according to the National Bureau of Statistics (NBS). Government leaders have called for measures to address the oversupply, with possible household registration system reforming in the pipeline.
