China's Property Bubble May Be Bursting

Years of price hikes and a booming real estate sector look to be coming to a close in China.

1 minute read

June 12, 2011, 9:00 AM PDT

By Nate Berg


Prices and property values are falling, leading some economists in China to predict a burst of the real estate bubble.

"Real estate is a foundation of China's phenomenal growth record in the past two decades, and its health is crucial to China's construction, steel and cement sectors.

Real estate is also a favoured investment of Chinese looking to get better returns than bank deposits pay.

Local municipalities and provinces depend on rising prices for land sales as well to fund infrastructure projects.

World Bank economists warned at a Beijing press briefing that a real-estate bubble was among the biggest economic risks China faces."

Thursday, June 9, 2011 in The Wall Street Journal

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