Friday, December 23, 2011
Has The Real Estate Bubble In China Burst?
This article describes a bursting real estate bubble in China. It was fueled by private developers, and investors who purchased multiple units on speculation that prices would continue to rise. The investors used cash to purchase the units so they are not forced to sell and banks are not at risk, but prices have dropped in many areas. Real estate has been about 10% of China's GDP, so it has been a contributor to the drop in GDP growth along with falling exports to the US and Europe. This will affect economies like Brazil and Australia which provide commodities to China.