Friday, October 1, 2010

Beijing Investigating Apartment Vacancy Rate

Beijing to Start Investigating Apartment Vacancy Rate
In March, media reported that statistics from the State Electricity Company show electricity meters in more than 65 million houses are at zero. The reports were based on a survey that was conducted in 660 cities across the country.
Bursting bubbles always follow a familiar pattern. There is product overhang. Prices are sticky, even as sales plunge. If people are buying places to live in them, then at least one can assume that someone will want the place if the current owner plans to move. Stupidly stating the obvious here, I know. But once you have overhang, this is no longer assured. A healthy market is one composed of a majority of real buyers, not speculators trading empty units. The conditions for a painful undershoot sure are plentiful here.

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