Up, up and away: Runaway residential prices in first-tier cities reignite fears of a big bubble bursting, but should they?
Some people seem very worried about China. There is a fear that the party is over, that with the current economic slowdown China may be beginning a long decline or, worse, headed for a big fall. Nowhere is this more evident than in the residential sector, where prices again soared dramatically in several major cities in 2013. At the same time, major Chinese developers and investors have been buying up properties overseas at a record pace, making some wonder if they may be getting out while the getting is good.
CBRE Global Investors, in its January 2014 Asia Pacific Watch, reported year-over-year residential housing price increases of 16 percent to 21 percent in China’s first-tier cities (Beijing, Shanghai, Shenzhen and Guangzhou). Of the 70 cities CBRE Global Investors tracked, only one, Wenzhou, had a price decline. And according to China’s National Bur