2011 is a very interesting year but there are many questions left behind in China, one major question is WHEN or IF the house price in Shanghai is ever going to meltdown?
Six months ago, Shanghai’s property market was the hottest on the planet. The story was compelling: the most dynamic city in the most dynamic economy, with affluent Chinese from both the mainland and abroad eager to pour their capital into the latest deal. Even foreigners were getting into the act: Morgan Stanley was part of a $90 million real estate fund for Shanghai, and individual Americans were plunking down their bucks for Shanghai flats and houses.
The whole world, it seemed, wanted in on the game. Who cared if speculators were buying and selling apartments within days? Prices had been clocking 30% annual increases from 2002 on.
To stop the increase, real estate control measures was applied among major cities in April 2011, and Shanghai is the latest victim of the government’s effort to cool a rocketing economy. Today, not only have prices of some luxury apartments dropped by as much as 30%, but sales volume is off by 70%. A deal on an apartment at Rainbow City Apartment complex: $1,840 per square meter, down from $2,215 in March.
As in every real estate bust, buyers are waiting for prices to fall further, while sellers are unwilling to make additional cuts for fear of fueling the downward spiral.
So who’s going to blink first? We will discover the answer in 2012 and it is a good time to review what happened in 2008.
Doc Zone has traveled the world – from Wall Street to Dubai to China – to investigate The Secret History of the Global Financial Collapse. Meltdown is the story of the bankers who crashed the world, the leaders who struggled to save it and the ordinary families who got crushed.
September 2008 launched an extraordinary chain of events: General Motors, the world’s largest company, went bust. Washington Mutual became the world’s largest bank failure. Lehman Brothers became the world’s largest bankruptcy ever – The damage quickly spread around the world, shattering global confidence in the fundamental structures of the international economy.
Meltdown also tells the stories of desperate foreclosed homeowners in California, disillusioned autoworkers at the end of the line in Ontario and furious workers in France who shocked the world by kidnapping their own bosses.
1. The Men Who Crashed the World. Greed and recklessness by the titans of Wall Street triggers the largest financial crash since the Great Depression. It’s left to US Treasury Secretary Hank Paulson, himself a former Wall Street banker, to try and avert further disaster.
2. A Global Tsunami. The meltdown’s devastation ripples around the world from California to Iceland and China. Facing economic ruin, desperate world leaders are at each other’s throats.
3. Paying the Price. The victims of the meltdown fight back. In Iceland, protesters force a government to fall. In Canada, ripped off autoworkers occupy their plant. And in France, furious union members kidnap their bosses.
4. After the Fall. Investigators begin to sift through the meltdown’s rubble. Shaken world leaders question the very foundations of modern capitalism while asking: could it all happen again?