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China property bubble risks growing

Risks of a property bubble are growing in mainland China’s major cities, the South China Morning Post reports. New home prices have risen more than 30% year on year among first-tier and a few second-tier cities. Signs of panic buying are already emerging. A China Vanke project in suburban Beijing sold out overnight. In Shenzhen, where August home prices jumped 37% year on year, some units as small as 6 square meters were offered for sale. Andy Xie, former Morgan Stanley economist, said China’s shadow banking sector gave buyers access to loans that effectively meant zero down payments, creating risks similar to those in the United States before the subprime crisis. “This is the same as zero down-payment mortgages in the US before 2008,” said Xie. 

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