While real estate price has been falling all over the world, China's real state price has been stable. Though the amount of transaction faltered in the fourth quarter of 2008, in the first quarter of 2009 you again see long lines in front of real-estate sales offices, and transaction quantity rose again, some apartments' price rose too. All marks of a real-estate bubble are salient in the Chinese market, from the price/earning ratio of (12:1 in shanghai) to the price/rent ratio (100:1 in Shanghai). But there is no sign that the bubble is going to burst.
How can the apartments become unaffordable for most people but still enjoy a stable demand? I was very confused until several friends of mine told me the same thing: one have to get a house to get married. Yes, that's answer, homeownership is the foundation of love in China. Since love is priceless, homes are of course priceless. The economic rules of supply and demand, or cost and benefit, only apply to material things. Spritual things, like love, are beyond those rules. Throughout history, people are willing to give up everything for love, so it's no surprise that now they are willing to pay everything for homeowership. Real state market in China is a bubble only if you think love is a bubble, which might burst at some point of human history.