Wednesday, January 20, 2010

Chinese Economy: Real Estate Sector is Becoming a Major Concern

Chinese economy suffered from global recession but now things are looking better. However, many people have turned to real estate. For many years, the GDP grew at a very high rate compared to the rest of the world. Many people came to the cities from rural areas and found work in factories and naturally when you have some more income then the first thing you look for is a land, house or apartment. Thus, even in the time of recession, the real estate market kept on growing and this continuous growth is turning into the main headache for the economy of the country.
The main problem is perhaps that except the buyers, all the other groups want to keep the growth in the real estate sector intact. Many housing projects are now going on and the developers of the projects don’t want to decrease the price. So, a crash is likely to happen sooner or later. It seems that there is no way out. The government is trying to control the situation but it is a very difficult thing. It is worth mentioning that nearly three decades ago similar thing happened in Japan and the Japanese real estate sector suffered a crushing blow and as a result, the economic growth of the country collapsed and did not recover fully until now.