China’s housing bubble: Myth or reality?

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‍By CGTN's Dialogue

China’s property market is being closely monitored both at home and abroad, with endless speculation that the bubble is about to burst.

Two Chinese real estate experts discussed the issue of the country’s overheated property market and the developing rental housing market on CGTN’s Dialogue.

Mo Tianquan, board chairman of property website fang.com, said that supply failing to meet demand is the fundamental problem in the property market.

He also said that there is too much money in the market with nowhere for it to flow to. For many Chinese residents, property is the ideal place for investment, which has kept the market soaring rather than fluctuating.

"So we need more supplies. The policy just mentioned 13 cities that they are trying to build houses for rent only. That is to fill the gap of the shortage of supply," he said.

Mo referred to a pilot program launched in 13 major cities to build rental housing on rural land, aimed at cooling off the property market and bringing prices down.

Mao Daqing, the deputy chairman of the China Real Estate Chamber of Commerce, said those 13 cities have always lacked land banking, so using rural land for rental properties is a wise move.

"The leverage ratio is going higher and higher. Every year it is going up like 10 percent, 20 percent. It is very, very fast. So even to the second-tier city, in the past five years, the residential leverage ratio is even higher than the first-tier city’s," he said, confirming the existence of a housing bubble in China.

Dialogue with Yang Rui is a 30-minute current affairs talk show on CGTN. It airs daily at 7.30 p.m. BJT (1130GMT), with rebroadcasts at 3.30 a.m. (1930GMT) and 11.30 a.m. (0330GMT).