Monday, March 8, 2010
Real estate prices are touching the skies in China and critics are criticizing it as a bubble. According to Nicholas Lardy, an economist from the Peterson Institute for International Economics in Washington, D.C, the number of Chinese people moving to big cities and doing well there have been increasing and this is fueling the real estate price boom. While the critics blame that the increasingly unaffordable prices are caused due to greedy developers and government policies.
Most of the action takes place in Shanghai. Since 2003 the prices have risen more than 150 percent there. A typical 1,100-square-foot apartment costs about $200,000. However by American standards that doesn’t sound very great as the average resident earns less than $5,000 a year.
Some properties are sold for more than $2,000 a square foot which shows that the luxury prices are high. According to Prudential Douglas Elliman real estate, the average luxury apartment in Manhattan was sold for less than $1,900 a square foot in the fourth quarter of 2009.