Photo: Elmastudio on flickr
Last year Chinese developers sold 9 million new homes.This year the government plans to build 10 million low-cost public homes, and for the first time public supply will exceed private supply, according to The Standard.
Obviously that’s a big threat to demand. Along with a weekend speech by Wen Jiabou pledging “resolutely” to press ahead with the war against speculators and the accumulation of many legal changes, home prices may finally be coming down.
The People’s Bank of China says it expects a 5 to 10 per cent drop this year.
Still, the Shanghai property index hasn’t fallen much since last spring, as investors doubt the government is serious.