Source: Business Times, 4 Mar 2010

While some foresee a property bubble bursting in China, there are others who think otherwise. One of them is Chris Brooke, President and CEO of CB Richard Ellis in Asia, who believes that the residential prices in China may stabilise in the second half of the year instead and it is unlikely to have a major correction. In fact, 2010 could be a year for China’s market to become more sustainable. Furthermore, he believes that large parts of the Singapore and Hong Kong property markets are not in risky territory.

Several measures have been implemented to slow down the property market. For example, banks were told last month by the China Banking Regulatory Commission to raise downpayments and interest rates for third mortgages. According to Mr. Brooke, such initiatives may dampen sentiment.

Besides the residential sector, there are also concerns about excess supply in China’s commercial sector as well. Reports of buildings left vacant while massive new ones take shape have fuelled more talk of a bubble. However, Mr. Brooke is optimistic. He feels that the excess supply will be taken up in several years as there will be demand from multinational corporations and domestic companies.