Residential property prices are in freefall in China as developers race to meet revenue targets for the year in a quickly deteriorating market. The country’s largest builders began discounting homes in Shanghai, Beijing, and Shenzhen in recent weeks, and the trend has now spread to second- and third-tier cities such as Hangzhou, Hefei, and Chongqing. In Chongqing, for instance, Hong Kong-based Hutchison Whampoa cut asking prices 32% at its Cape Coral project. “The price war has begun,” said Alan Chiang Sheung-lai of property consultant DTZ to the South China Morning Post.
Of course, back in April the same problem seemed to be developing. And here we are. Still, it seems only a matter of when and not if the bubble pops. I can only pass on what I read and not predict.
On the bright side for the Chinese, housing prices should drop a lot. Anybody still living in a cave after the housing bubble pops will either just like living in a cave or invested in housing (directly or by lending).
If China is ten feed tall, it's only because they're standing on a house of cards.
UPDATE: We'll see:
The Chinese banks are in serious trouble. They have papered over losses. The bank books in China aren’t giving an accurate picture of their true financial position. In the US this is fraud. In China, it’s supported by the government.
I think we can at least know that there won't be an Occupy Tiananmen Square movement to protest the 1% in China being bailed out.
The French sure aren't acting like the Chinese will bail them out:
France has unveiled the toughest austerity measures since World War Two despite the looming danger of a double-dip recession, vowing to slash borrowing by €65bn over the next five years in a last-ditch effort to save the country's AAA rating.
Those darned Tea Partiers are active in France, too?
Tip to Instapundit for both links.
