Something’s Got to Give
Real estate developers the world over are known to be overly optimistic at the top of cycles but downright pessimistic at the bottom, when the economy starts showing signs of new growth. We have seen examples of this in many countries, regardless of differences in their internal dynamics. The stories of US developers continuing their activities in the face of declining sales were very similar to those published about developers in Spain who could not stop building in a declining market, resulting in an estimated 2 million units of excess residential property and a total collapse of the residential market.
Although it may be different this time, I’ve noticed very similar patterns while reading recent news and research reports from China. The Chinese economy grew in the double digits for almost 20 years, and now is the first time growth really has started to slow down. In developed economies, we’ve had numerous economic cycles and have data indicating what is fa