in a recent article from China Daily, there was an amazing fact from The China Statistics Yearbook 2008 revealed. They found that the average home price in
Beijing was 23 times a local family’s average income, compared with the
international level of four to six times. Do you think they are setting themselves up for a MAJOR fall? Their government has come through with up to 30% discounts on mortgages for first time home buyers, but it doesn’t seem like that will be enough to make those loans truly a prudent investment over time.
China is also experiencing irrational property price increases. “One thing we are concerned about is whether there is a new bubble
being shaped. While people have a strong perception of excessive
liquidity and further price growth, the possibility of a bubble is
pretty big,” said Gu Yunchang, secretary-general of the China Real
Estate Association.
Read more »