'Terrible consequences' if China's property bubble bursts: Vanke boss
Staff Reporter 2013-03-23 13:10
A real estate expo in Shanghai. (Photo/Xinhua)
A Chinese real estate tycoon has warned that the country's property bubble is in danger of bursting, Guangzhou's 21st Century Business Herald reports.
Wang Shi, chairman of leading property developer Vanke Group, posted on his microblog on March 11 that there would be terrible consequences if property prices rise beyond control.
China's National Bureau of Statistics reported a week later that 90% of the country's 70 biggest cities reported a rise in housing prices in February, with many hitting an ominous record high, said the paper.
Zhang Dawei, a leading researcher with Centraline Property in Beijing, ascribed the trend to China's ample money supply, which encourages land developers to invest in new projects despite government efforts to rein in the property market by placing restrictions on purchases.
Gu Yunchang, vice president of the China Real Estate Industry Association, told the paper that a bubble exists, but only in some regions and not across the entire country. He said that many would-be buyers had stayed away from the market in the last couple of years in the anticipation that prices would start to decline because of the government's control measures.
Now these individuals have re-entered the market after finding that housing prices were continuing to rise of slipping, said Gu.
Wang Shi said the government's measures have been effective in checking housing prices, but said they had to be revised or their effects would not last long.
The 21st Century Business Herald also quoted an executive from a property company as saying that administrative measures which interfere with market forces would not be able to keep the bubble depressed in the long run.
