Did you know that 80% of urban Chinese houses are owner occupied? Actually I think there are very few actual houses, but if 'apartment' is substituted for 'house' in this sentence, it would appear that this is true, according to the Economist.
It is true that house prices have risen by 30 since 2002, but with GDP rising at a rate of around 10% per annum this is no less than one might expect. In fact the ratio of house prices to disposable income has fallen by 25% since 1999.
As I have mentioned elsewhere, I spent last week visiting China to look at properties for investment. Certainly the market seemed to be pretty solid to me, but it is nice to see some professional economists give their imprimatur.
The authorities seem genuinely interested in controlling house price inflation. The most obvious way in which they do this is to lay down infrastructure at a furious place and permit developers to build factories, offices and apartments at a commensurate pace. The other way is to restrict foreign ownership of real estate, and to impose various transaction and capital gains taxes which bite if property is sold within five years of purchase.
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