China is living on the Field of Dream Theory of 'Build it and they will Come.'
'They' being buyers. 'It' being massive skyscrapers only elitist speculators can afford.
China has 2 major problems:
- Oversupply and continuous building based on 'expectations' of future growth, and;
- No organic owner-occupant buyers due to rampant over valuation due to speculation
It is happening now-- slowly, but surely.
China lending down and rates rising. Money supply continues to rise but at a much slower rate than previous. This should continue as China raises rates and reserve requirements to try and fight off food and energy inflation.
Grab the Popcorn:
Here is a great, yet lengthy, video on China's property bubble. It is well worth your time today.
Housing prices are indeed out of control in China...
Massive price increases with no income growth
According to a survey by the Taiwan Real Estate Research Center released last month, housing prices in Taipei city have soared 73 percent over the past five years, but average household income has risen by only 1.2 percent.Everything is sunshine and cookies however..for now, that is...
Build it and They Will Come... if they don't come, build more and GDP will follow.
If nothing else, the fire sale that follows the bust will be amazing!