Construction continued at Soho China’s residential and commercial Sanlitun SOHO complex in Beijing, China, last month. SOHO China, the biggest property developer in Beijing’s central business district, said pre-sales will surpass $1.46 billion for the first time this year "largely" because of the government’s stimulus plan.
Housing bubble forecasts
Is there is a housing bubble in China and is it about to burst? The answer seems to be that no one actually knows. And that, if it happens, it will be localized.
Property prices across 70 large and medium-sized cities rose 3.9% year on year in October, the fastest annual growth rate this year, and this is the fifth month in a row prices have gone up. A recent World Bank report suggests that income growth in China is keeping up with price rises. And fundamental demand for improved housing should provide long-term support for Chinese house prices.
The picture appears to be highly localized. In Shenzhen, for example, prices are up 13.8% year on year. Still, three of the 70 Chinese cities surveyed saw house prices fall in October and, in several others, price gains remain subdued.
The Wall Street Journal said longer term peaks and troughs could be avoided by giving banks more freedom to set the price of credit and greater leeway over who they lend to. But is there a housing bubble? The Wall Street Journal comes to no definite answer.