Are House Prices Rising Too Fast in China?

WPIEA2010274 Image
Price:  $18.00

Release Date: © December, 2010
ISBN : 978-1-45521-081-7
Stock #: WPIEA2010274
Stock Status: On back-order

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Sharp increase in house prices combined with the extraordinary Chinese lending growth during 2009 has led to concerns of an emerging real estate bubble. We find that, for China as a whole, the current levels of house prices do not seem significantly higher than would be justified by underlying fundamentals. However, there are signs of overvaluation in some cities’ mass-market and luxury segments. Unlike advanced economies before 2007-8, prices have tended to correct frequently in China.Given persistently low real interest rates, lack of alternative investment and mortgage-to-GDP trend, rapid property price growth in China has, and will continue to have,a structural driver.

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