Tuesday, November 10, 2009

The looming housing bubble of 2010 - Arthur Kroeber

Municipality of ShanghaiShanghai via Wikipedia
Without government action, China is heading for a housing bubble by the second half of 2010, tells Arthur Kroeber Radio Australia. Many people see investment in housing property as their retirement fund.
Arthur Kroeber:
Housing is really the focus because there really isn't an effective pension system in China so individuals think of investments in property as their best insurance policy for old age. So in addition to the pressure created by literraly 10 or 15-million people moving into Chinese cities from the countryside every year and needing to be housed, on top of that you have this pressure from people already in the cities who want to buy their second house because that's essentially their retirement plan. So every time you get extra money in the system as you have now, that puts tremendous upward pressure on housing prices and makes it very difficult for ordinary families on just living on normal incomes to think about buying a house. So I think that's going to be a major problem for the government next year and they're going to have to come up with a new set of economic policies that balances the need for continued stimulus to boost growth while at the same time trying to keep
ark photo apr 08-1_head shotArthur Kroeber by Fantake via Flickr
housing prices under control.
Then Radio Australia deviates into what this might mean for Australia.

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Arthur Kroeber is a speaker at the China Speakers Bureau. When you need him at your conference or other meetings, do let us know.
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