Kiyoko Fujimura
December 29, 2009

So…yet another housing bubble appears to be emerging, but this time in a market which seemed to be the one of the few ‘untouchable’ markets in the current recession. Although China appeared to be one country that poured enough stimulus to overcome the fall in aggregate demand for its exports, it has created yet another bubble to watch.

“[T]he government’s otherwise successful $586-billion stimulus program has caused ‘not just one bubble, but many bubbles’ in China’s real-estate market.” The Globe and Mail

Hopefully it won’t be a Dubai-style bubble which necessitates a bail-out, but at least China wouldn’t have to go crying to a neighbour like Abu Dhabi for funding. Speculative real estate purchases are making Beijing real estate unaffordable for some residents as the price of housing in some areas is higher than in Dubai where the standard of living is much higher.

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