We’ve heard these prognostications for many, many years.
Ready to pop? Really? I don’t think anyone knows.
Home prices rose 0.5% in May from April, according to the China Real Estate Index System, which is compiled in part by SouFun Holdings.
Compare to this June 9, 2011 article:
According to Dragonomics, home prices in mine major cities tracked by Dragonomics recoded a 4.9% YOY drop in April. So one might declare that the story is finished.
Although it can be taken as a good news for the bearish camp, this data point somewhat contradicts other data sources. For instance, CREIS recorded 0.53% month-on-month rise in their 100-city index in May, and prices of top 10 cities rose by 0.11% on an month-on-month basis, while on an year-on-year basis, prices rose by 3.94%. Contradictory data points suggest that it might be hard to say that we are already at the very top of the market, but we are probably close to it as we have seen sluggish transactions volume in various markets across countries.
So, what is different this time? The disputants in the WSJ video — posted on page one of today’s WSJ — do not say. It is as unsupported a commentary as I have ever heard. (If the speakers wish to contradict my position, please email me.)
I have argued for years that the property bubble, when it explodes, will exert extraordinary pressures upon the entire edifice of modern China. But is it about to pop now? Who knows?
But a media outlet such as WSJ ought to muster data and argument sufficient to support its conclusion of an immediate financial holocaust — and it simply does not. REWRITE!
The WSJ Video Embed: China’s Property “Bubble” — Popping? by AsiaBizBlog, unless otherwise expressly stated, is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.