Author Topic: China's Real Estate Bubble (Read 660 times)

sarge · « **on:** Apr 19, 2011, 08:24 AM »

Interesting fact in China. There are now 64 million empty apartments and residential buildings across China because of skyrocketing prices of housing. Their economy maybe growing in a fast pace, but more and more average Chinese cannot afford houses for their family. There are discussions roaming around that this might be the next US like recession that could affect the whole world. I hope this will not affect our real estate market or the rising economy of PH.

http://philippinebargainproperties.blogspot.com/2011/04/chinas-real-estate-bubble.html

richpulubi · « **Reply #1 on:** Apr 19, 2011, 09:27 AM »

It will have an effect, but I think it will be minor. Bear in mind that the RE bubble in the US was caused by too much debt. Real estate in China is government funded, and not via debt. Chances are, RE structural values will flatten, but from what i've read, LAND values are rapidly rising.

Be more concerned about the negative S&P rating of US sovereign debt. THAT may affect world economy more!

richardthebrave · « **Reply #2 on:** Apr 19, 2011, 04:46 PM »

^i agree to that. real estate bubble just belongs to real estate. and will only be confined to that particular industry.

yes be more concerned with US sovereign debt, US treasury bills, US Bonds. and be more concerned also with gold and silver - magandang investment as it moves opposite the US Dollar and world currencies!

sarge · « **Reply #3 on:** Apr 19, 2011, 05:14 PM »

That would be good sana if it will just be confined with real estate, but according to reports china ongoing developments account for 50% consumption of steel around the world. So what I can see here is that if China will suddenly halt construction of real estate projects, many countries that relies with China for steel will also be affected. I hope it will not be a domino effect again like US recession. There are even analyst that are saying US real estate meltdown is nothing if this China RE bubble will burst.

bauer · « **Reply #4 on:** Apr 20, 2011, 12:24 PM »

china is already slowing down on their purchases of copper and other metals.

china already imposed a loan limit of up to 70% of the property value while 30% must be equitized by the buyer

china already imposed a property tax on the second house/condo purchased by the buyer

china already increased the lending rates for property loans.

china is doing the right stuff in controlling the property sector from boom to bust scenario. I do not think china will suffer a BIG bubble burst in the 5 year horizon.