What can the problem of vacant homes in China / Iran learn?

According to Trade News, the existence of 65 million vacant houses in China threatens the construction sector of this country. the reason? Over the past two decades, the Chinese government has made massive interventions in this area, with the aim of providing housing for first-time homeowners.

As reported by the world of economics, not only has this goal not been achieved now, but a number of “ghost towns” have been created with a lot of empty houses around metropolises.

Threats to China’s construction sector

In Iran, the problem of vacant houses is more or less seen.

According to economist Hossein Abdo Tabrizi, the problem of surplus construction is not unique to Iran and has occurred in some countries, but in no country is it as large as China.

“China’s construction sector is so overcrowded that officials worry it could no longer be the main driver of the economy,” he said.

A culture of saving by buying a home

Abdo Tabrizi added in a note that the unbalanced situation of supply and demand shows that, like in Iran, the culture of saving with the purchase of housing is prevalent in China.

In this country, too, rents have risen so much that in some cities the government has set a maximum ceiling of five percent for the annual increase in rents.

Encourage building with motivated earnings

Abdo Tabrizi stressed that the Chinese government (land lessor), like municipalities in Iran, has encouraged more construction with financial incentives and regardless of demand.

According to him, the similarities between the two countries, which have both empty houses and many families who can not afford to buy or rent them, contain lessons for Iran.

It is suggested to read the full text of this economist’s note entitled The Problem of Empty Homes in Iran and China.

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