This post from VoxEU has lots of interesting data – real estate indices and price to rent ratios, by city – and concludes that continued price increases are unsustainable. Regulators have even come out warning about a decline later this year. Whether this produces a U.S. style cascade (unlikely) hinges on whether or not the system is highly leveraged; this article from Mish provides some interesting anecdotal accounts of informal lending creating de facto, if not de jure loans that are linked to housing. Any sort of systemic threat to China’s growth prospects though seem more likely to come from general infrastructure spending (see previous post); of which housing prices are an ancillary side effect. More on this as I collect more information.

Other real estate: on a crappy NYT story note, this fine piece of journalism chronicles the very authentic experience of Mrs. Bradford, an American who moves to sleepy exotic Shanghai and lives in an ~Rmb13,200 flat (well above the monthly income of an average Shanghainese resident) which she furnished for USD15,000 (roughly the equivalent to two years’ worth of income for, again, your average Shanghainese family). It sounds like a nice place, though calling it ‘authentic’ is nauseating, even if it is in the real estate section. They should know that going native in Shanghai means living in a 1980s Communist cement edifice for USD200 a month and slaying cockroaches with one’s bare hands.