Categorized | International

China’s Housing Bubble Continues to Deflate

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The threat of a housing bubble in China continues to grow less likely, as residential real estate prices fell to their lowest point in sixteen months. The continued decline comes as a result of government officials declaring that they had to plans to eliminate the restrictive measures in place any time in the near future.

Home prices in China have not exactly taken a nosedive. However, they have steadily declined at small rates for the last year and a half. The average price dropped roughly 0.3% from where it was in April.

The current decline in housing prices in China is the longest the nation has ever experienced since records were kept. Residential real estate values have fallen in nearly seventy-five percent of the nation’s cities.

Some economists believed that China would ease their property restrictions over fears that the market was collapsing. The government, however, opted not to do so, citing that the declines have been gradual and have shown no indication of a potential crash. Rather, they believe that the market is simply correcting itself after prices became overly inflated.

There is no indication as to when China will eventually ease the property restrictions. Developers have greatly struggled over the last year and a half, and have been persistent in calling upon the government to eliminate some of the limitations in place. However, the government has essentially denied those developers time and time again.

As a result of the housing decline and overall restrictions, many Chinese investors have looked to housing markets overseas.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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