How can China deal with this real estate glut - that 720 million square meters of unsold housing? Political advisors say urbanization may be the way.
Real estate developers are feeling the heat, especially in less developed areas of China.
Large numbers of new apartment buildings stand empty. What used to be an asset has now become a liability.
China's ailing housing market has troubled the country's financial sector and the economy. The government aims to stimulate property sales this year and has already slashed deed taxes.
CPPCC members approved the tax move and expect additional policy changes to speed up the destocking process.
"There are over 200 million migrant workers without their own housing, and we know certain regions are renovating shantytowns," said Fu Jun, CPPCC member.
"I believe the government could purchase some of the unsold housing and sell to those workers. This would cut inventory, and meet the urgent demand. Besides, I suggest developers cut their prices at the same time to spur sales."
Fu is one of the developers that faces huge inventory problems. He has construction projects in 19 cities. Most of the projects are in China's third- and fourth-tier markets.
The Chinese government believes urbanization is a new growth driver. But Fu says housing alone isn't enough.
"The government lags in public services. It also needs to strengthen infrastructure such as schools, hospitals, and shopping malls. This would be a systemic construction," Fu said.
CPPCC members say high quality urbanization should focus on residents and that the process needs careful design.
"The design depends on local culture and customs. Each town should have its own character. And when we build a town, it should last over a century, not just twenty or thirty years and then get overhauled and rebuilt," said Sun Taili, CPPCC member.
"We also need accompanying businesses. The industrial sector should be environment friendly and the agricultural sector could focus on further processing to have high added-values, So, the businesses can create jobs and make people stay. "
Sun is a developer from a second-tier city and has focused on rural development for years. Sun says urbanization would help reduce the property glut.
"Destocking is not abandoning the unsold housing or using it for other purposes. We need to work on both the supply and demand side. Accompanying projects and high standard services will raise the level of the communities and attract buyers to live in. The housing price would not become lower, but higher," Sun said.
Both expressed their hopes for the real estate industry and the government's will to advance the urbanization process. The question remains what policies could be expected and how would they be carried out.
