Steve Keen on China's Housing Bubble

Keen sums up the situation:

The trouble with China's hot property

I began to imagine the frenzy that could develop if prices started to fall, since the mutual interests of developers and purchasers would then work in reverse: in a glutted market with falling prices, the first one finished is the one that sells.

That is something that can happen in Western bubbles as well, but it can be very misleading to apply Western thinking to the Chinese situation, because some things that happen in China have no parallel in the West. One such Chinese idiosyncrasy is the link between property development and industrial expansion. Much of the expansion in industrial capacity actually comes from enterprises -- primarily export-oriented -- that are established by local councils.

And where do the councils get the money to build these factories? From selling land on the periphery of the council’s domain to developers. And where do the developers get the money to buy the land? From the formal and shadow banking systems. So in this indirect way the expansion of China’s production depends on debt-financed real estate speculation.

Also in the article, he mentions the BIS has housing data for China. They are available here: Property price statistics