Property developer Zhang Xin made a fortune over the past decade on the back of a building boom fuelled by China’s blistering economic growth and the privatisation of its housing market.
Now the co-founder of SOHO China, one of the nation’s leading developers, is worried Beijing’s efforts to cool the sector are hurting sales and threatening to send some debt-laden property developers to the wall.
“In my 16 years as a developer this is by far the most challenging year I’ve ever had, in terms of what we could sell,” Zhang, chief executive of Beijing-based SOHO, recently told reporters.
China has invested heavily in property – about US$750bil in 2010 alone – since it privatised the market in the late 1990s, ending decades of state allocated housing and enabling a growing middle class to own their own homes.
But with real estate investment now a key driver of the economy, there are fears a collapse in the market could trigger social unrest fuelled by millions of home-owners seeing the value of their properties plummet.
News Source: The Star