Saturday, April 17, 2010

The Debts of the Lenders: China to Curb Real Estate Bubble

Affordable housing in China is a joke. Instead, the real estate market - along with the stock market - has turned into a giant casino. Fund flows from Chinese investors are contributing to the bubble because of strict capital controls that remain on where, what, when, and how (regular) native Chinese can spend their funds. Thus, this news is encouraging - even if it appears to be yet another round of mere talk instead of more substantive action.

Surging Prices

Property prices in 70 major cities surged 11.7 percent in March from a year earlier, the most since records began in 2005, government data showed last week.

In an April 15 statement after the release of first-quarter numbers for gross domestic product, the State Council said that local governments have failed to control speculation. Besides limiting the risk of price bubbles, policy makers want to keep housing affordable.
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