A national political advisor estimated that it will take China 5.19 years to consume the existing housing inventories, the Beijing News reported Thursday.

Zhang Hongming, a member of the Chinese People’s Political Consultative Conference and a member of the expert committee with the Ministry of Housing and Urban-Rural Development.[Photo/China.org.cn]

The floor space of all housing inventories across China might reach 6.67 billion square meters, said Zhang Hongming, a member of the 12th National Committee of the Chinese People's Political Consultative Conference, the country's top political advisory body that convenes a national meeting every March.

These inventories cost a total investment of some 40 trillion yuan (US$6.11 trillion), of which about one third came from property developers, said Zhang, who is also a member of the expert committee with the Ministry of Housing and Urban-Rural Development.

There are two major challenges in consuming the inventories, he said.

The first challenge lies in non-residential buildings. In 2011, when the house prices was rising at a high speed, local governments in China's major cities, including Beijing, Shanghai and Guangzhou, issued policies to curb the overheating real estate market by imposing restrictions on purchasing power. This practice made many investors turn to office buildings and commercial buildings. However, significant inventories have now been found in the non-residential buildings.

The second challenge lies in small cities. Despite the recent market recovery in big cities, small cities and townships around China have still seen difficulties in consuming housing inventories, because their problems can't be simply solved by price reduction.

The recent policy that encourages migrant workers to buy houses in small cities will play a positive role on the housing market, but the effect will be limited, Zhang said.

Small cities must create enough business and job opportunities to make people willing to settle down and thus buy houses there, he said.

Reducing housing inventories has become a great concern for China's top leadership. In December, at the Central Economic Work Conference, which was a key economic policy meeting, reducing housing inventories was listed among the top five economic targets of 2016.

To boost the housing market, the government has loosened its previous restrictions. On Feb. 2, China's central bank, the People's Bank of China, lowered the applicable down payment rate. On Feb. 19, the Ministry of Finance, the State Administration of Taxation and the Ministry of Housing and Urban-Rural Development jointly announced a policy on cutting down taxes for home purchases in most Chinese cities.