Inflated by high-end speculation and the flow of cheap money, China’s property bubble seems to keep on growing and now it’s nearing its popping point, says the founder of a Hong Kong-based research firm.
Gillem Tulloch of Forensic Asia told Reuters the “bubble” will burst in the second half of this year once China stops “injecting ridiculous amounts of credit into the economy.”
“I’ve never come across a government that’s actually managed to deflate a bubble gradually,” Tulloch said.
Asked whether investors should hold out any hope for Chinese property development stocks, Tulloch replied: “I would say there’s absolutely no value in any of these stocks whatsoever . . . The Chinese property companies have the best terms of trade in Asia and yet they’re the most highly leveraged in Asia, so when this bubble bursts they’ll all be negatively affected.”
Full article: China’s property bubble will burst in latter half of 2013, says research firm (Financial Post)