Abstract:
Real estate and IPO boom in China has set the economy rolling even faster. This is evident from the fact that the pace with which the country is surging ahead surely requires applaud. Since then real estate industry is at its zenith, so are the IPOs of the real estate companies. The write up below highlights some of the fears and jubilations of the common man in China.Effect of subprime crisis in United States of America:
The subprime mortgage crisis prevailing in the United States of America, has had little effect on the Chinese real estate sector. On the contrary, the real estate sector in China is undergoing a blissful phase. The price of property is swelling like never before. In fact, reports indicate that there are many real estate companies, whose shares have magnified significantly, as much as 15%. As the real estate industry is booming, more and more "concrete jungles" are coming up. Consequently, these flourishing companies are also making their presence felt by introducing their IPO or initial public offerings.Price of property has increased:
More and more real estate companies are launching IPO or initial public offering in China. It has been observed that real estate costs in China increased by 26% ( on an average) in the year 2007. In the major cities, price hike was approximately 30%. It was also noticed that whenever Chinese markets become volatile, more and more people flock to the real estate sector in the country.A temporary phase:
Currently, China is reeling under the IPO boom. However, experts say that not all stocks perform well. There are also many instances to this. There are fears that this state may wane a bit especially after the Olympic Games 2008, when Beijing plays host. Experts are of the view that the real estate price rise may not last for long and is only a temporary phase. The reason being that the Chinese government has already worked up on several policies pertaining to existing cost in real estate, with which the government intends to arrest this hike in prices.Central Business Districts:
The real estate price rise and consequently the boost in IPO can also be attributed to the fact that there has been an increase in the number of re locations in the country. Due to this more number of CBD s or the Central Business Districts are coming up.Those people who have acquired landed property, which then seemed a wasteland or a barren land quite near to the mainland are minting money out of the situation. Despite the fears of the housing bubble bursting, it seems that China has opted for basking in the glory of the prevailing situation.
