Editor’s note: For a number of years, both Chinese and Western economists have commented on China’s out-of-control real estate bubble. According to all indications, the bubble should have burst a long time ago. But it hasn’t—for reasons all of its own. This article by Cai Shenkun uncovers some of the dynamics of China’s distorted real estate market.
The number one dinner table conversation in Beijing these days is the red-hot real estate market. There seems to be no limit for Beijing’s property market; it boasts the most expensive real estate projects, the largest number of buyers, and the most frenzied investor activity.
At the end of 2014, a friend of mine bought an apartment at the West Fourth Ring Road for under 50,000 yuan per square meter (about $740 per square foot). Now it is valued at over 100,000 yuan per square meter. Another friend bought a property in Hebei GuAn last year for 7,000 yuan per square meter, and it is now worth over 20,000 yuan per square meter. Yet another friend brought a property in Tianjin Wuqing earlier this year for 10,000 yuan per square meter. Already, it too is worth over 20,000 yuan per square meter.
