China’s Hot Property Cools Down?

The question of 2008, is China’s booming real estate market, slowing down this Winter? 2007 saw the market at it’s peak. With the Olympics scheduled in China in 2008, real estate prices rocketed. However the latter months of 2007, saw a sudden reverse to this peak in property prices. China’s hot property market is now showing signs of slowing down. An increase in prices, high rates of interest, in addition to a government drive to cool speculation are partly repsonsible for this flagging.

While the boom sure is faltering, it’s unlikely there’ll be a crash, predict experts. And a repeat show of the U.S subprime mortgage crisis is not eminent, for the financial derivatives used in the US are most certainly not used in China. “Prices are falling only in several cities where speculation has been rampant,” said Cao Xute, analyst at Sinolink Securities. “Prices in cities such as Shanghai and Beijing are still mostly underpinned by strong demand from consumers.”

The Real Estate situation is closely linked to the government and how the government takes stock of the situation will be scruitnized by all. Managing Director of international real estate company – FPD Savills, Mr. Albert Lau, feels that Government’s intervention should act only as a catalyst, and the real estate market should be a self-regulating one.

All we can do is wait and watch…