A Spectacular Rise in House Prices
During the Chinese New Year—Spring Festival, there is a spectacular rise in house prices in a southeast island, named Hainan, in China. It is reported that the house prices rise approximate thousands of yuan in a month. It is understood that there is a Hainan international tourism construction program settled. Based on the new policies, 17 billion yuan on house trading are done in five days. The amount of trading money in five days is equal to the whole year’s trading in 2008. A lot of people and businessmen are looking up the value of the tourism. Therefore, it is wise to invest money on the land. This behavior is common in China these years. The craziest person just bought 60 houses one time and paid off in one lump sum. As far as I know, not only the house prices but also the hotel prices are rising sharply. If you want to enjoy one night in a five-star hotel, you should book the room ahead of time and spend nearly 3000 dollars per night there.
A lot of people just concern about the situation in Hainan now. They connect today’s situation with the bubble economies in real estate in 1990s. They are afraid that the speed of increasing house prices will hit Chinese finance again. However, government responds that there are reasonable explanations for rising in house prices. First, the program of Hainan international tourism construction is lasting long. Second, the scarcities of resources and natural beauty in the island push the price up. Finally, the original house prices in Hainan are lower than any other area. Therefore, there is a big difference between the bubble economies in 1990s.
In my opinion, government should have some measures to avoid some vice businessmen or individual person use means to resell at a profit. Otherwise, government should control the prices continuously increasing unreasonable and in case of bubble economies appearing.
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