Rising Housing Prices in China
China’s real estate market has done about as well as the real estate market has done in the States over the past five or so years: That is, it has blown itself into a bubble. The main difference between the US and Chinese housing market is that the US market will see nominal year over year price declines this year and next year (and perhaps the year after that depending on the severity of the decline)… which means that there are some serious real price declines in housing prices going on in America right now.
Buyers in China Still Think Prices Can Rise Forever
The other main difference between China and America is that the average Chinese buyer (or speculator from the Middle East, see here for more on Middle Eastern tycoons buying up China stocks and real estate) hasn’t caught on that price increases cannot go on forever in an already overly inflated market. Instead, it seems the Chinese real estate market is still blissfully climbing up. For now, that is. This from this week’s Modern Weekly, translated from Chinese into English by The China Expat:
Shanghai was the only city to see its real estate drop in value, as China’s national statistics bureau most recent statistics reveal that in the third quarter of this year, the average price of residential real estate in 70 medium and large sized Chinese cities went up by 6.1%. Shenzhen and Beijing saw the most appreciation, and Shanghai is the only city in China that saw a fall in real estate prices from both last season and last month.
I wrote somewhat haphazardly about the overall housing bubble in today’s China here, and it seems like things are getting more and more overheated, even as the Chinese government has repeatedly implemented measures to slow down the real estate market in China. Perhaps it will institute another, more severe, measure just as the bubble starts to deflate. Let’s hope not for any Chinese or expat FBs out there.