The slow-motion collapse of housing prices in China continues apace with homebuyers in Hangzhou, the capital of the eastern Zhejiang province, being offered 20% discounts.
China’s housing market has been grossly oversupplied for some time as local governments, with limited legal taxing powers, sold land to developers to raise revenue to pay for social services.
The question now is whether the bubble bursts or gently deflates.
“The current adjustment in home prices in Hangzhou is just the beginning,” real estate agent Weng Leizheng told Caixin financial newspaper last week.
