The property prices in China have reached to record heights. The real estate market of China was hit by recession along other sectors in 2008. But in 2009 the real estate sector showed remarkable growth. According to China’s central bank the new home mortgages in the years 2009 were four times greater than the last year. Only in Shanghai the real estate growth rate was almost 57% more than the last year. This clearly shows how much the real estate prices have increased.

Experts are of the opinion that there is a bubble in the China real estate market and it is unprecedented. This thing is that the China real estate market has attracted a lot of investment in it. Companies and banks have started huge construction projects. People are taking loans and mortgages to purchase property. However the experts fear that the bubble will burst in 2010, bringing down the whole real estate sector along with banks, developers, stock market and homeowners and any other stakeholder who was in this will have to bear losses. The Government of China has made some changes to tax laws to get hold of this situation. Further they are taking steps to stimulate the property market including smaller down-payment requirements, lower loan rates for first-time buyers and vastly increased bank lending. They are also making efforts to control the flipping of properties, often done by the investors and homeowners.

Some experts say the reason behind the growth of real estate sector of China is their huge population. There is a gap between the demand and the supply in the real estate market of China. To some extent this might be true. But if the Government of China is taking corrective steps, it will likely stop the economic growth of the country. On the other hand, if the bubble burst and no preventive measures are taken, the whole economy and the people related to this sector will be at loss.