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[HONG KONG] Chinese developer Fantasia Holdings Group has launched a vacation rental business similar to Airbnb Inc and HomeAway Inc to utilise the scores of homes left unsold as a property boom faded.
Fantasia's Home ENE online platform, launched last month, will rival Tujia, the Chinese home rental firm that this week raised US$300 million from investors including Singapore-based developer CapitaLand Ltd and Hong-Kong's All-Stars Investment Ltd to expand at home and abroad.
"There are more than 50 million vacant units in urban China, which have become a major source of properties for vacation use," Fantasia chairman and CEO Pan Jun said in a statement on Wednesday.
He cited research by Chinese Internet consultants iResearch which showed the short-term lease market is set to grow more than double to 10.5 billion yuan (US$1.69 billion) in 2015 from 4 billion yuan in 2014.
Unsold apartments are a hallmark of many provincial Chinese cities, as local governments used land sales and property development to generate growth.
This inventory, however, has weighed on China's flagging real estate market, which the government is trying to revive in a bid to stem a slowdown in the economy which looks set to post its softest growth this year in a quarter of a century.
David Ji, the head of China investment at real estate firm Knight Frank, said these unsold properties could provide ideal accommodation for domestic tourists. "In the future the tourist destinations won't be just Beijing and Shanghai, there will be new ones emerging in second and third-tier cities, where hospitality facilities are now inadequate," he said.
Richard Ji, founding partner at All-Stars Investment which invests in Tujia, also said the company was interested in using unsold apartments. "China has the world's largest tourist population...and the largest number of vacant houses in its domestic market, which form a fertile ground for the house sharing market," he told Reuters.
Tujia, which launched in late 2011 and has more than 310,000 properties listed, said on Monday it was now worth US$1 billion.