I Think there are two typically causes: 1.Developers often acquire land in remote rural areas to build housing projects, anticipating urban expansion that would drive up property values. However, China's urbanization has largely reached its limit, making further expansion unlikely. 2.Some developers construct properties on leased land without securing proper ownership titles. If full property rights aren't obtained before sales commence, these units become unsellable and are eventually abandoned, as buyers avoid legally precarious investments.
1. PRC urbanization still has long way to go, rate slowed to ~0.8-1% per year, that's still 10-14 million per year. Current urbanization is ~65%, goal is 70% by 2030s, but "urbanized" by east asian standards like SKR, JP is ~90%. So still looking at 200-300m to urbanize (factoring in population decline to 1300m) by 2050s. Depends on hukou reforms and rural policies, a lot of rural old don't want to move, but if they want to age with modern amenities/services, they will probably have to.
Current excess PRC square footage in housing inventory is enough for 100-150m people. About 10 years of urbanization headroom. This is without accounting for replacing deprecated housing stock. Reality of speculation and (mis)allocation of "ghost" developments is messy, but over next 25 years, PRC is still ~100m short on urban housing, they just also have a very wasteful 100-150m decade long housing runway that needs to be unwound in mean time.
2. It's product of PRC land finance system, local govs revenue cash cow is to raise money by developing land / RE. System got gamed/speculated to hell. 3RL finally starved process, shock left a lot of financing drama on existing projects. System slowly figuring out how to restart/finish, remember a lot of these are presales... people are waiting on their units. But the TLDR is PRC / CCP haven't figured out politically palatable way of introducing property taxes which would go a long way to replace inefficient/speculative land finance model.
