It is always interesting to read different views of the state of Chinese real estate. Personally I would go with people who are not selling anything

As a Beijing homeowner myself, I’ve experienced this puzzling phenomenon firsthand. We have been told that the value of the condo we bought last year has gone up 30% based on sales of new nearby developments, but it’s impossible to confirm since there is no secondary market. Originally we tried to rent the place, but we couldn’t find takers at any price that could remotely cover the mortgage, despite a prime location. When we decided to move in instead, we discovered that while the building was sold out long ago, hardly anyone actually lives there. Same with another 800-unit project down the street: every unit went for top dollar well before completion, but now the lights are off and nobody’s home.

What makes the situation worse is a dramatic slump in real estate prices. The Beijing Municipal Bureau of Statistics reported this month that housing sales in the city dropped 40% last year. It is predicted by Chinese economists that housing prices this year will drop between 15% to 20% in Beijing and Shanghai

“As developers run down inventory rapidly, they will soon start to buy land and increase spending again,” said Frank Gong, chief China economist and strategist at JPMorgan Chase & Co. in Hong Kong. “Property investment, which accounts for 10 percent of China’s GDP and is a trigger for growth in related sectors, will become a strong driving force in China’s recovery.”