Home -> Law Blog Directory -> International Law Blogs -> China Law Blog

International Law

: China Law Blog

China Real Estate: The Next Sound You Hear Will Be A Pop.

By Dan Harris and Steve Dickinson

Much has been written on China's real estate bubble and so I have felt little need to cover it here. A recent post by Patrick Chovanec, entitled, "Foreign Policy: China's Bubble Trouble," so nicely summed up my feelings on the issue, I cannot resist at least pointing it out. Chovanec was spurred to write his post after having been quoted in a Christina Larson article in Foreign Policy Magazine, entitled, "Bubble, Bubble, China's in Trouble: The mad scramble for Chinese real estate." The reason I say these two writings sum up my feelings is because I simply do not believe a market is sustainable when so many people are buying into that market simply as a way of speculating that it will continue rising. I am of the view that a market for something like real estate needs what I will call "real demand" to sustain itself. By real demand, I mean demand from those who are actually buying the item for their own benefit and not just as an investment. The idea of buying a poorly made condo (and, let's face it, many of them are) in China just to have it sit empty is just not my idea of a good investment. It just isn't. What do you think?

Full post as published by China Law Blog on May 16, 2010 (boomark / email).