China News recently reported that China’s official top-level think tank acknowledged the fact that prices are plummeting in some areas of China’s housing market. Li Wei, Director of the State Council Development Research Center, reported at a conference that risks are escalating in the housing market. The bubbles are already bursting in tier-three and tier-four cities. [Editor’s note: tier-three and tier-four cities are typically mid-sized cities that are not the national or provincial capital.] The Research Center recently released a report on studies and statistics which demonstrated that the Chinese housing market shows the “highest uncertainty in today’s Chinese economy.” While top-tier cities still enjoy rising housing prices, more and more “ghost towns” [Editor’s note: These are newly developed towns that remain vacant because there are no real estate buyers.] are appearing in or near smaller cities, which is becoming a heavy burden to the financial system.
Source: China News, October 30, 2013