China getting costlier on demand side?

As a after effect of global business slow down home prices in China have climbed 60 percent since
2008 forcing the government to launch a $645 billion stimulus program to counter the effects of the
global financial crisis. As per real estate blog ince 20!0" gpvernment bodies are tr#ing to controll
this rise in prises b# imposing higher down$pa#ment re%uirements" raising interest rates on loans for
second$home purchases" and increasing construction of low$cost housing. &on ban' mone# lenders
were also put on chec' to the upheaval.
Shocking Figures
About 6( percent of housing under
construction in China last #ear was in
less affluent cities such as )enghua"
according to &omura *oldings +&,-..
About !20 miles south of hanghai"
with a population of 500"000. /he cit#
is filled with pawn shops" te0tile and
garment factories" and empt#
residential buildings.
1hereas the e0perts sa# that the urban
income growth in China has
outstripped the rise in home prices in
the past eight #ears. Also" Chinese
bu#ers pa# for homes either in cash or
with significant down pa#ments. 1hat has changed is that the Chinese government is more willing
to let private companies fail" and 2that is a good thing"3 he sa#s. 24f #ou are going to have creative
destruction" some companies are going to have to go out of business.3
Investment happening Abroad
Chinese retail and institutional investors are targeting the developed countries as the# not onl# see
mar'et but the prices of land is soaring li'e 5et s'# at home. 6opulation pressure and eas#
investment process abroad has oo7ed the demand of cross over real estate in vestment in china .
according to an article in -euters" last #ear itself a total of $!!.5 billion was invested in overseas
propert#. After China8s richest man made a bid to bu# historic ,adrid s'#scraper" its now American
online propert# site 9illow 4nc. which entered into the partnership with Chinese real estate portal
:ei5ing ;isheng <e5u 4nformation ervices +<e5u. to cater the oo7ing demand of Chinese
investment in American real estate industr#.