In China’s largest cities, Beijing and Shanghai, the estimated growth of housing prices has been greatly underestimated by the Chinese government.With the Average Selling Price Index, a government-run property index, reporting with growth 200% below accurate levels, there is fear looming about the stability of the Chinese housing market. While there are problems associated with evaluating this growth due to the fact that most properties are relatively new and have not changed hands, making it hard to properly evaluate a property, the threat still exists. With several middle class families claiming that they cannot afford a home during this time of extreme growth, the worry of a bubble similar to the 2008 housing market crisis in the United States is very real to families living in Beijing and Shanghai. In the world’s second largest economy, the potential nosedive this market could face would affect more than just China’s economy.
Frangos, Alex. “Study: China Underestimated House Price Growth in Beijing, Shanghai – China Real Time Report – WSJ.” WSJ Blogs – WSJ. 28 Jan. 2013.