According to a survey of residential home prices in the top 100 markets in China, prices dropped again in January. The market has been super-hot for over a year, and there have been worries that a real estate bubble, followed by a rapid contraction, could wipe out the net worth of many Chinese–not unlike what has happened in the US, Spain, and Ireland.
China tighten money supply earlier in the year to help combat the bubble, among other things. Now, it has loosened, which is theory could press prices higher later this year
Reuterss reports that
Average home prices in 100 Chinese cities fell 0.18 percent in January from December, marking the fifth consecutive monthly decline as Beijing continued its efforts to curb housing prices, a private survey showed on Wednesday.
China appears determined to continue discouraging property purchases, and Chinese Premier Wen Jiabao said on Tuesday that he wanted to see a reasonable pull-back in Chinese home prices in 2012.