Shanghai and Hong Kong property prices may fall after being driven higher by speculative demand, said investor Jim Rogers today in a Bloomberg video interview.
According to Jim Rogers efforts to restrain lending underscore the government’s attempt to take “some of the heat out of the economy”. But he underlined that the rest of the Chinese economy inclusing the chinese stock market is “hardly in a bubble".
“Certainly, Shanghai real estate or Hong Kong real estate should decline,” considering that chinese and Hong Kong`s urban real estate may be in bubble territory, “My goodness, if anything’s in a bubble in the world, that and U.S. government bonds are certainly very overpriced.”
China raised the share of deposits banks must set aside as reserves starting on January 18, as the government seeks to rein in liquidity from record lending without stalling a recovery.
“China now realizes that they’ve created too much money, that prices are going up too much and they’re trying to slow things down,” Rogers said. “These things are designed to take some of the heat out of the economy. Let’s hope it works.”
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