Kunming's aggressive urbanisation campaign has pushed property values ever-higher over the last several years. However, recently released housing statistics appear to show that the city's once-robust housing market is slowing significantly.
This announcement comes just days after state-run media suggested the Chinese economy should move more towards service industries and technology while relying less on construction as a means of keeping the economy strong. A sudden drop in residential sales coupled with an effort to reinvent the national economy could mean the Spring City is in for a serious correction to its real estate market.
In October, usually a strong month for the housing market in Kunming, sales of new dwellings were down by 5,818 units, a drop of 26 percent compared with the previous month. The national average over the same period saw home sales drop by six percent.
If the current slowdown in the real estate market continues Kunming could experience a serious housing glut. According to government statistics the city already has 4.75 million square meters of unsold residential space, largely in new apartment blocks.
The urban renewal strategy of aggressively demolishing shoddily built neighbourhoods and erecting high-rises is the legacy of former Kunming party secretary Qiu He. The affects of his "urban village transformation program" (城中村改造) can be seen in the more than 300 real estate development projects currently underway in the city.
Continuing construction may make the number of vacant residences rise further. City officials are predicting that within five years the Spring City will move ahead of Shanghai in per capita residential space. By June of this year, Kunming had already surpassed Shanghai in terms of both per capita retail and office space.