Nervous tension in China's real estate market

In Chinese developers betting it all on Gold September and Silver October, I mentioned one developer is looking to increase prices during the busy season. A pair of articles out today take the opposite view, one says developers will slash prices to move inventory and the other looks to the weakening market for existing homes.

It seems as though September and October should be volatile, with the U.S. fiscal cliff, simmering problems in Europe and the slowdown in China. The real estate market doesn't have to collapse for some developers to collapse: stable prices with falling sales volume would be enough to put more firms at risk of bankruptcy. That said, if homebuyers smell blood in the water, they will take home prices down, so the market remains precariously balanced on the edge of a cliff.

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