The Chinese Real Estate Market Heats Up

The Chinese Real Estate market was the focus of an article I read today in the NY Times, regarding China's unrelenting Real Estate boom, which has driven prices up nationwide 140% since 2007. Keep in mind, this is about the time American and European housing markets began collapsing, sending real-estate values plummeting. In Beijing alone, real-estate prices have increased by as much as 800% over the past 8 years! This increase has frozen many working class buyers completely out of the market. At the moment, there is an estimated 65 million apartments across all of China bough as speculative investments, currently sit empty. The rise in prices have many economist and analyst worried that a Real-Estate bubble has formed and if it pops, it could be disastrous. Although I'm not sure if I agree with this assessment, I have watched as the Chinese Government has actively intervened to prevent economic and market chaos, seen in countries where the Real-Estate Bubble did indeed burst. This government intervention helped China through the recent Global Recession. Here is an article related to this post, it came out three days after this post, I've come back to add it since its relevant and informative:Inflation in China

I believe the Chinese have been watching the world's unfolding mortgage melt down and aftermath, very closely and will work very hard to prevent it happening in their country. The central government has undertaken several measures recently to address the concern of an overheating property market, by Raising Interest Rates, and requiring banks to hold more on reserves. Instituting these types of polices is suppose to reflect the Central governments attempt to reign in available credit and slow down the speculation that has sent prices soaring. As the Chinese middle class emerges from this world's most populous country, policy makers there, have their hands full for determining economic policy that both stabilizes the country, and makes it attractive to investors. China must balance its growth with price stabilization, like many countries around the World.