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![]() New 12" Chinese Egg-shape Wedding Party Decor Paper Lantern US $2.99
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Chinese Lanterns Decorations
Is Chinese Real Estate Over Valued?
Chinese economy has grown by 10% this year showing no signs of a slow down. Chinese property prices have risen by 9% last year. Parents are doing a lot of future planning for their children's welfare and buying them a home now makes so much sense.
Chinese government is well aware of housing market rising too quick and is implementing several new measures in an attempt to cool down the market. The government increased the interest rates for first time in 36 months. Investors are restricted from buying more than two properties as they need 50% deposits. Property taxes are rising for investors.
Its attempts may be working. Xie believes that while prices in some smaller cities might keep climbing, "prices in Tier 1 cities are unlikely to reclaim the heights seen late last year in places such as Beijing". Chinese property now faces "a mild bear market... [which] will last three years". Andy predicts that the market will suffer a slow decline rather than an explosive deflation, which "will have less of an effect on China's economy than many expected".
The only concern is, attempts to control China's housing market may result in bubbles forming elsewhere. Restrictions on the Hong Kong market, for example, have resulted in buyers flocking to neighbouring Hong Kong, reports Money Week. Hong Kong has seen prices surge by 50% since early 2009. As Eddie Hui, real estate professor at Hong Kong Polytechnic University, puts it: "There's a strong belief among mainland Chinese that investing in property is the best way to preserve capital value." Credit Suisse analysts Cusson Leung and Joyce Kwock reckon Hong Kong residential prices will gain another 30% by the end of 2011.
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