It doesn't make much economic sense that these houses are empty. Why not rent them out or sell them for whatever the market will bear?
You've probably heard that your new car loses most of its value (that is, most of the value it will ever lose) the minute you drive it out of the dealership. The label "new" is worth much more than the functionality.
This can also be true of apartments. I have seen it written that it is true of Chinese apartments, though I can't personally attest one way or the other.
An apartment or house could degrade when being lived in - but that's the internal furnishings, which is "easily" replaced. The concrete, walls and other structural features degrade regardless of whether an occupant is in it or not!
This is also true in China. Shrink wrap is left on things indefinitely so that they will appear to be new. I've seen it happen on things ranging from doorknobs (already installed on the door) to board games (opened and played, but with the shrink wrap carefully preserved to fit over the lid).
Would you be interested in renting a 400 sf dilapidated teardown shack in western Kansas, no utilities, five hours from the nearest big city, no local jobs, and not near anything of consequence?
As young Chinese flock to the large cities, they might have grown up in something similar to the above, but just because they're leaving it behind doesn't take it out of the housing stock.
That's perhaps a bit of an oversimplification, but a good number of that double digit percent is abandoning the rural lifestyle held over from the cultural revolution.
some apartments are finished, these days it’s more likely you’ll find a fully finished apartment, ready for move in, but they do have the unfinished apartments, but it’s too much trouble and trending down lately.
you’re right about the investment aspect, i believe in early < 2012, there was no limit to the number of houses you could own or mortgages you could take so the extremely weathly purchased apartments in batch as investment, never considered living or renting these out, many of these back then were unfinished, so you pay off the downpayment, get a mortgage, and leave it as an investment to sell later without having to deal with the complications of outfiting the apartment with drywall, hardwood floors, appliances, fixtures, paint, etc, and having to deal with rental hassles. basically what they purchased were these concrete enclosures with basic plumbing and electricity in place.
i used to rent an apartment in downtown shanghai, 2 bedroom, 1 bathroom, roughly 100 sq m (1000 square foot) new apartment, fully furnished with 60 inch led tv, furniture, etc, that cost me about 6k rmb a month (1000 usd a month), to buy would have cost me about 4m rmb (670k usd), i had pretty good relationship with the landlord, her father owned about 20 similar apartments in the complex, they were from a small town.
Hahaha, things are even more crazier in Shenzhen. You can rent a 1.5 million buck apparent for $500
For monopolies yes. But for commodities, you have to go with the market rate - best value product wins the sale.