China's property bubble gets larger

According to The Wall Street Journal, China’s attempts to contain property prices have been halfhearted. If anything, they may have made the bubble grow even bigger. Average new-home prices in August were up 1.3% from July, the government reported, the 17th straight increase and the biggest since at least January 2011. Prices declined in only four of the 70 cities surveyed. The latest leg of China’s property boom, which began last year in the biggest cities has recently spread to smaller cities, driving local governments to roll out tightening measures, such as capping land prices. However, tightening measures haven’t tackled the key factor of rising home prices – easy credit. As a percentage of total loans, outstanding mortgage loans are at their highest since at least 2008.