Investors are concerned that policy makers will implement additional tightening measures to control residential property prices.
According to the NSB index of residential property prices in 70 tier 1 and tier 2 cities, prices fell in highly populated cities like Beijing, Shanghai, Guangzhou and Shenzhen to name a few.
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Although residential-property prices fell briefly during the latest global financial crisis, according to Credit Suisse, they shot up quickly again in 2009 and 2010.
After peaking in early 2011, prices of residential property in cities across China have fallen, leaving developers burdened by unsold inventory and piles of debt.
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While Singapore's official government residential-property indexes show that prices edged up in the city-state last quarter from the quarter before, property consulting company CBRE Group Inc.
Other factors may have contributed to the drop, such as some foreign investors believing Singapore's prices for residential property are unsustainable and better investment opportunities lie elsewhere.
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Chinese stocks will probably not be so fortunate, with markets in both Hong Kong and Shanghai set to finish the week lower amid fears that Beijing will implement further tightening measures to control prices in the residential property market.
The property market has seen an increase in residential prices of more than 32% since 2007 and luxury developments and conversions are in demand.
Head of Hong Kong, Property and Conglomerates Research Cusson Leung expects residential prices and office rents to jump 30% in 2011, and retail rents to rise 15% in the same period.
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There was massive inflation in asset prices, especially in commercial and residential property, and a hideous and dangerous explosion of the accumulation of debt: an analysis by McKinsey, which I've mentioned here many times before, shows that the aggregate of household, business, government and bank debt increased from less than 200% of GDP in 1987 to a record 500% of GDP in 2008, and hasn't really fallen since.
Residential property sales declined 23% in 2012 from the year before, and prices of all properties and of apartments fell 2.3% and 12.8%, respectively, during that time.
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