Invasion of the Cranes

No matter where you look in Nanchang you're likely to see at least one crane. For the past decade the city, like much of China as a whole, has been undergoing a major construction boom; residential, commercial and office buildings. Despite the economic crisis in the west resulting in a slow down of the Chinese economy there seems to be no slow down in the rate of construction here in Nanchang.

Is there a property bubble here? Well most analysts says yes but Nanchang is still catching up with China's more developed cities so it might still have some room to wriggle and continue to grow even if other parts of the country do end up with economic problems. Nevertheless people have been predicting an end to the 'China Miracle' for quite a few years now but hasn't come to pass. Only time will tell.

One major problem though is the rise in house prices. Property in Nanchang currently sells at between 6000 to 10,000 Chinese yuan per square metre but the average income per person is only about 2000 to 3000* yuan per month. This has been caused by property speculators buying up dozens of apartments, entire blocks in some cases, thus pushing up prices despite the increase in available property. Developers also charge high prices in order to get maximum return on their investments. The government has taken measures to combat this, such as limiting the number of apartments one person can buy. However these measures have done little to limit the continuing skyrocketing of prices. Some married couples even divorce in order to be able to buy more properties!

The craze for property as an investment started about 10 to 15 years ago and at the moment there seems to be no end in sight to this trend. Consequently the invasion of the cranes continues...

*at the moment 10 Chinese yuan is roughly equal to 1 GB Pound. So an average apartment of 100 sq metres will cost between 60,000 to 100,000 pounds despite the average salary being just 200 to 300 pounds per month (though some people such as civil servants, teachers, and others who work for the government or a state-owned enterprise in some capacity can get a housing allowance of between 100 to 200 pounds per month)

(By Andy Mek)