#CHINA 'S REALTY #BUBBLE TO BURST

Bust looming over China property
 market?

New home prices
 in China have 
soared, more than quadrupling in
 Beijing and Shanghai since 
2003, and more
 than doubling in the country as a 
whole. — Reuters pic - 

BEIJING, June 1 — After years of boom that have seen prices rocket, the prospect of a bust is looming over China’s vast property sector, with authorities hoping to avoid a meltdown that could send shock waves through the world’s second-biggest economy.Housing was doled out by the state when Communist-style collectivism dominated economic management. But in the past two decades that has given way to market-oriented principles as China’s economy has opened.

New home prices have soared, more than quadrupling in Beijing and Shanghai since 2003, and more than doubling in the country as a whole, according to a report by Jeremy Stevens, Beijing-based Asia economist at South Africa’s Standard Bank.

The increases have been a key source of wealth for China’s rising middle classes, and a major driver of the economy.

Now some — including individuals who have made fortunes — foresee imminent disaster.

“I think Chinese property is the Titanic about to crash into the iceberg right in front of it,” Pan Shiyi, billionaire chairman of commercial developer SOHO China, said at a forum, China Business News reported last week.

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 Insights: 


How big is the real estate bubble in China? On good authority we understand that the number of empty homes exceeds 53 million. Clearly we are nearing a collapse, but the big problem will be the ripple effect on the the global economy that could be crippling for years to come.

You knew this  was going to happen sooner or later. Shorting the banking sector is starting to look attractive and it bolsters the prospects for precious metals including Gold!


Investors' Insights
June 2, 2012

Why is the boom ending?   

Investor