This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

China Real Estate ETF: Little Evidence of Bubble

A number of statistical bulletins released in recent weeks have served as an excellent illustration of the ever-widening gap between the world's emerging and developed economies. While the U.S. and Europe struggle to stay afloat and eke out positive gross domestic product growth, the concern in China is very different.

Beijing has been concerned about an overheating economy, seeking to reel in stimulus policies introduced during the depths of the recent recession. The latest round of data indicates that, for the most part, these policies have been successful in accomplishing their stated objectives. But one troublesome area continues to cause anxiety among investors around the globe -- Chinese real estate prices have become a runaway freight train, surging at rates that seem unsustainable.

China's National Bureau of Statistics said this week that average urban property prices climbed 12.8% in April from a year earlier, accelerating from March's impressive 11.7% pace. Consumer price inflation also picked up, rising to 2.8% from 2.4% on a year-over-year basis, although this rate remains below the government's stated 3% target. April property sales were down slightly from March levels, but still came in about 27% higher than the previous year, according to the new statistics.

Perhaps the most telling indication of the status of China's property markets will come next month, since April figures didn't fully reflect policy changes made during the month. In mid-April, the Chinese government raised the down payment for buyers buying a second home to 50% from 40% and said that first-time homebuyers must pay no less than 30% of the property price if the area is above 90 square meters.

The government also said it would increase land supply available for new residential properties in a bid to slow rises in real estate values and encourage more sustainable pricing trends; the Ministry of Land and Resources will more than double the land supply available for new homes.

As the uncertainty surrounding Greece's public finances has shown, chaos in one corner of the world quickly ripples throughout global equity markets. So investors everywhere are keeping a close eye on the situation playing out in China's real estate market.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
TAO $16.03 -1.49%
AAPL $93.56 -0.75%
FB $100.74 -0.26%
GOOG $675.51 -1.30%
TSLA $152.13 5.90%


Chart of I:DJI
DOW 15,616.29 -298.45 -1.88%
S&P 500 1,812.14 -39.72 -2.14%
NASDAQ 4,220.08 -63.5120 -1.48%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs