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- Dear friend,
How much a sq. ft. of built up area costs in China, say for a 2 bed flat of 1000 sq. ft. in a city comparable to Chennai. How much is it in other countries like UK, USA, Germany, Japan etc.
- A significant event?
China is reputed to have pumped in a stimulus program in 2009 which was bigger even than the one by the US in terms of its GDP.
And a large chunk of this is rumored to have gone into property speculation with all kinds of wild allegations. Probably true because recently, last month, property prices had risen by 20% in a single month!!!
The Govt has probably reached a crisis-resolution situation before the whole thing blew up. They have asked ALL State companies whose core business is not property, to put up an total exit plan within 15 days.
In another move they are looking towards investigating speculative and hoarding practices and insisting on 70% of all land coming into the market this year to build affordable housing!
There are many signs that economists are using to predict a significant cooling of the economy to lower growth rates.
We need to see what effect this will have, coupled with the sovereign debt issues in many parts of the world, on the double dip. Of course, we will not for some time to come, but this might be a significant inflexion point.
The link ...
- Some more data on Chinese RE Bubble
Check out this interesting link ...
Talks of price of 1500 SFt flat at $615k (2.75 Crores?) and a rent to price ratio of 1:500 (far higher than the 1:300 which we think is very high!!!
Another article talks of a 31% decline in Beijing RE prices. Check this out here ...
Coupled with the steady decline of the Shanghai Composite (20% from its 2009 peak) something big and nasty is brewing in China!