Debate:how to burst the real-estate bubble?

Raining hot prices in real estate market

China's city governments and ministries have been told to build more low cost housing. They have also been ordered to push property developers to complete projects more quickly in order to help ease property prices.
The directive has come from the country's cabinet, the State Council, amid fears of a property bubble. It also says it wants to prevent speculative foreign investment pushing up prices even further.
China's leaders are worried that house prices in many cities here are rising too fast now.

A man walks across a snowy overhead bridge towards business buildings in Beijing (January 6, 2010, China Daily).jpg A man walks across a snowy overhead bridge towards business buildings in Beijing (January 6, 2010, China Daily)

In China housing starts nationwide rose a staggering 194% year-over-year in November 2009. And the central bank noted new home mortgages in the first nine months of last year totaled about $139.5 billion, quadruple the amount offered a year earlier.
The China Daily noted that in terms of house prices as a proportion of incomes, China is now the most expensive place in the world. Indeed, there is a whiff of Dubai about the Chinese property market at the moment. By one estimate, the vacancy rate of Pudong, the central business district of Shanghai, is as high as 50% This is not to say there's not a real estate bubble in China. Rather, overinvestment and overbuilding is sometimes a prerequisite of an anticipated mass urban migration such as the one China is destined to experience.

Shenyang, China - March 11 2009: A child plays along a railway at a shanty town where residents will move into low-rent apartments provided by the government.

In a recently published report, the Annual Report on Development of Housing Market in China (2009-2010), the CASS said the real estate market is bound to proceed on a steady upward trajectory next year, though the fourth quarter is likely to see a modest leveling off.

In Internazionale, Marzo – Aprile 2009

Discussioni:

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2-) Accordo Fiat e Chrysler: quale è il costo per i lavoratori e pensionati?

Per Vincenzo Simoni – primo maggio 2009.

Click on the image to enlarge it.

I've said it before, and I'll say it again. If there's anything good that has come out of the financial crisis it's the slew of high-quality graphics to help us understand what's going on. Some visualizations attempt to explain it all while others focus on affected business. Others concentrate on how we, as citizens are affected. Some show those who are responsible. After you examine these 27 visualizations and infographics, no doubt you'll have a pretty good idea about what's going on.

Center for Public Integrity Investigation Identifies Top 25 Subprime Lenders and their Wall Street Backers

WASHINGTON, D.C., May 6, 2009 — The top subprime lenders whose loans are largely blamed for triggering the global economic meltdown were owned or backed by giant banks now collecting billions of dollars in bailout money, according to Who’s Behind the Financial Meltdown?, a new investigation by the Center for Public Integrity.

By La Rédaction de Money Week, 03 April 2009 - By Caroline Bruneau

Could the expropriation of shareholders, the last-stand rescue strategy adopted by the German government, happen here? The goal of the German operation: to save a little-known bank, Hypo Real Estate, from collapsing, taking all of the German banking system with it. HRE has accrued a debt of nearly €100 billion and the government is forced, under a special law for emergencies, to keep this sick monster afloat.

by Mike Whitney

Global Research, April 21, 2009

Due to the lifting of the foreclosure moratorium at the end of March, the downward slide in housing prices is gaining speed. The moratorium was initiated in January to give Obama's anti-foreclosure program---which is a combination of mortgage modifications and refinancing---a chance to succeed. The goal of the plan was to keep up to 9 million struggling homeowners in their homes, but it's clear now that the program will fall well-short of its objective.

What tools could we use to reestablish accessible prices in the property market that seems to be growing endlessly?
The neoliberal response continues to be “more market”, while we believe – partially because of the failure of this ideological practice – that we need a consistent and qualified return of public intervention.
But clearly this would not be sufficient to deal with the effects of neoliberal globalization in the cities and the weakening of public authorities.

By Tom Foremski - October 16, 2008

The Invisible One Quadrillion Dollar Equation -- Asymmetric Leverage and Systemic Risk