Are House Prices Rising Too Fast in China?
AbstractSharp increase in house prices combined with the extraordinary Chinese lending growth during 2009 has led to concerns of an emerging real estate bubble. We find that, for China as a whole, the current levels of house prices do not seem significantly higher than would be justified by underlying fundamentals. However, there are signs of overvaluation in some cities’ mass-market and luxury segments. Unlike advanced economies before 2007-8, prices have tended to correct frequently in China.Given persistently low real interest rates, lack of alternative investment and mortgage-to-GDP trend, rapid property price growth in China has, and will continue to have,a structural driver.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 10/274.
Date of creation: 01 Dec 2010
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-01-03 (All new papers)
- NEP-CNA-2011-01-03 (China)
- NEP-TRA-2011-01-03 (Transition Economics)
- NEP-URE-2011-01-03 (Urban & Real Estate Economics)
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