China Appears on Verge of Dangerous Real Estate Decline

Real estate is one of the most important sectors of the Chinese economy, and for years has one way or another driven much of the country’s economic growth. But in January, the number of houses bought and sold across China dropped precipitously compared to the same time last year.

The price at which properties were sold only dipped slightly, meaning that the industry is not in crisis, but growth in real estate prices grew at a slower pace in January than it typically does.

Both of these trends — few transactions, and a price tending toward stagnation — are warning signs to the real estate industry in China. Experts have for years argued and speculated about whether and to what degree the Chinese real estate market was a bubble, and when it would burst or deflate.

“Housing prices in China’s first tier cities are not likely to drop sharply soon, but they won’t increase much either,” said Jason Ma, a senior commentator on economic issues with New Tang Dynasty Television.

[link to www.theepochtimes.com]