X2:
thank you again. Very useful information.
I would still worry about a housing bubble in China. Even if we assume 1/2 of all the income is hidden, the average house sold price would be 18.5 (1/2 of 37) times the average income. A 15% pullback would result in most savings being wiped out by this logic if one had to sell and every person owned a house. ( I realize that is not the case but it does sober one up as to how a little jolt will have very severe effects). A 15% sell off from the top is not alot when you say it has increased 10 fold over the past 12-13 years(as you stated in an earlier post).
The other issue is if China uses its domestic savings for domestic needs, suddenly all those reserves become much more important in day to day life to avoid the social unrest potential problem. (Just look at France, Ireland, Greece and Spain if austerity measures need to start). At that point, perhaps those with money will still look to invest in more stable economies (let's hope that is Canada) but it certainly means our Canadian real estate is at risk since as you have apply demonstrated, and from the article stating that most of the domestic investor demand dried up in 2008, it is very dangerous for Canada's real estate to be dependent on the Chinese state of affairs. Right now, China is a juggernaught. What would happen to China and Canada should it sputter?
