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The big bubble is not as big and bad as the west makes it out to be. The government has slowed the the lending and not has almost slowed or stopped the rise of property in Shanghai. In China, the dream of almost all the upcoming or rich people is to have an apt in Shanghai or Beijing. The Shanghai central apartments is priced just like downtown N.Y. or London or Tokyo. So I don't see a bubble now, the only time I do see a big bubble is 8-10 years. why? well because every Shanghai family or Beijing family they got 5 apartments or so when their building were town down and forced to move. In about 8-10 years the old in the family will pass on. Then the kid or kids usually kid will be faced with a decision, sell the extra apartments or keep. If you own 5 apartments in Shanghai now your family has 1,000,000 USD assets already The kid will keep one to live one to rent and sell the rest, why?, given that his whole life he can not make the kind of money that the apartment is worth. You sell for 1,000,000 rmb, I want to get out I will sell for 950,000, another will sell for 900,000 and then you might have a bubble. |
The good thing is the government has already told the developers not to plan or expect the kind of growth it has seen in the last 6 years. The skies over Shanghai have been the bluest in the 16 and half years I have been in Shanghai. Do a search of Shanghai skies and you will see the most amount of blue skies in shanghai ever. It just means the building of Shanghai has slowed down and their is less dust in the air.
China is good at one thing! control. They said they will stop inflation and they have done that. What they say, they actually do!