The Chinese Miracle cannot Escape the law of gravity -- Real estate
markets across China join general slump

-- Micky's HO: What goes up, have to come down. --

Real estate markets across China join general slump

By Keith Bradsher
Wednesday, September 10, 2008

GUANGZHOU, China: The United States, Britain, Spain and other countries
suffering from real estate market downturns now have fresh company: China.

Starting here in southeastern China and now spreading north and west
across the country, the number of homes changing hands has dropped
precipitously. Faced with few buyers, sellers are starting to cut their
prices for residential and commercial real estate.

Brokers describe price decreases of as little as 4 percent over the past
year in Harbin in northeastern China, for example. But the volume of
transactions there has plunged by two-thirds.

In some areas of southeastern China, where the number of transactions
began falling earlier, prices have dropped by 10 percent to 40 percent.

China's is not facing a real estate market downtun but a general
credit crunch - that is a lack of liquidity in the banking
sector.which is effecting the number to real estate transactions.
This credit crunch probably caused by concerns over how
much Chinese exposure is there to the Fannie Mae/Freddie Mac Subprime
Bonds and how to stablize the Yuan when its
pegged to a falling US dollar..Because these subprime mortgage bonds
were sold on the international market (as safe investments backed by
the US government) the effects of this financial disaster is
international in scope (I'm not sure if it's any comfort to know one
has company in the frying pan - but there are alot of foriegn banks
that are hopping mad at the USA now.).

The USA problem is due to the situation where the property values fall
below the mortgage value. In the subprime disaster - brokers were
allow to ignore the mortgagee's ability to pay using what is called...