Despite conflicting reports about how much the Chinese real estate market is actually simmering down – yesterday we spotted one on-site reporter ridiculing the notion that developers have slowed at all – the China Real Estate Information Corp. (CRIC) reported yesterday that it lost money in the third quarter of 2011 thanks to the “Chinese government’s efforts to cool the real estate market”[1]. CRIC is a real estate information and consulting company. It lost $413 million year-over-year in Q3 2011. CRIC also predicted that business will continue to be slow thanks to “tightening credit, developer’s cautious ad spending and the Chinese government’s continued restrictive policies regarding real estate.”

Analysts have called the Chinese real estate bubble (which the government has insisted is not a bubble for the past five years) “not only an economic problem [but] also a social disease…and a ticking time bomb”[2]. Now that the market is cooling, Chinese economists are hopeful that the country will avoid the type of crash that the United States is currently enduring thanks to mandatory higher down payments and the fact that most banks made most of their loans “when the prices were still low.” Some even suggest that the government “help burst the bubble slowly [to] control some of the risks.”

Do you think that China will be able to manage its real estate bubble?

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[1] http://www.businessweek.com/ap/financialnews/D9R5SNAG0.htm

[2] http://www.chinadaily.com.cn/cndy/2011-11/22/content_14137585.htm