Noted Chinese Real Estate Tycoon, Vanke’s Wang Shi, Warns About Danger in China’s Housing Market

September 25, 2013 Leave a comment

Noted Chinese Real Estate Tycoon Warns About Danger in China’s Housing Market

09-25 10:33 Caijing

“Rises of housing prices in first-tier and second-tier Chinese cities bear striking similarities to those in the bubble economy of Japan at the end of 1980s’, ” said Wang, chairman of China Vanke The red-hot housing market in China’s big cities are much like the situation in Japan’s bubble economy two decades ago, said Wang Shi, a prominent real estate tycoon in a dire warning over unrelenting housing market in the world’s second largest economy. “Rises of housing prices in first-tier and second-tier Chinese cities bear striking similarities to those in the bubble economy of Japan at the end of 1980s’, ” said Wang, chairman of China Vanke, the country’s largest real estate developer by market value, Tuesday on his weibo. “The bubbles in Japan burst. Take a lesson from that,” Wang said.This is the third warning the 62-year-old Vanke chairman has given this year after he said earlier this month that sell-off of assets in Beijing and Shanghai by Asian’s richest man Li Ka-shing sent a “signal”.

Wang later again expressed his concerns over soaring house prices in Beiing’s third and fourth rings, citing crashes of HK’s real estate market following the 1997 financial storm.

Wang’s gruesome remarks came as latest statistics suggested home prices in China’s big cities refuse to bog down despite on-going government regulations.

Of the 70 cities monitored, 69 have reported higher home prices on a yearly basis in August, with biggest cities like Beijing, Shanghai and Guangzhou leading the rally, National Bureau of Statistics said in early September.

Year-on-year growth in newly-built residential houses averaged 18-20 percent in first-tier cities and 7-10 percent in second-tier cities.

Beijing Housing Exhibition, a bellwether for house market in the capital city, attracted roughly 180,000 people in four days between September 19th and 22nd , signaling demand for houses is still strong.

“Developers in Beijing don’t even need promotions, they just stay at home waiting prices to go up,” said Yi Zhongli, a CCTV commentator.

“And this is how crazy the market is,” he added.

Filed under Macro Trends

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