2010-04-03 17:57

BEIJING - Predictions have flooded the Internet in China this week about the country's runaway property market collapsing in 2011.

Much of the chatter voiced little concern about the possible severe consequences, instead expressed hope for the crash to come.

Coming at a time when complaints about mounting housing prices are on the rise, the online debate has drawn enormous attention from ordinary residents, industry insiders, experts and received substantive media coverage.

Speculation started after a comparison was made between China's property market and that of Japan. In 1991, Japan's property bubble burst. Following the Japanese yen's appreciation in 1985, large amounts of capital flowed into the country's real estate, inflating prices artificially which eventually led to a burst.

Two decades later, some say the same is happening in China, both in sequence and pace: the yuan appreciated in 2005, capital flowed to property markets in 2006, resulting in soaring housing prices in 2007, and now the burst is imminent.

Hope for a crash?

Feng Zhichao, a thirty-something man, has been living in Beijing for 12 years, since starting college. He is working for a foreign company with a salary of 5,000 yuan ($732.4) per month and pays 750 yuan per month for rent for a room less than 10 square meters.

"House prices in Beijing are crazy! I wish the property market would collapse this year! Then I could buy an apartment of my own in the city and be in the position to think about marriage," he said. "If I were wealthy enough, I would not care about home prices," he added.

Previously owned homes in Beijing stood at 14,000 yuan per square meter in the first quarter of this year, much higher than about 9,300 yuan in the same period of last year, according to the local statistics bureau.

Dong Wei, a 27 year-old Beijinger and an employee with a foreign IT company, said: "I don't believe the property market will crash, as the government will not let that happen. It would be disastrous."

Housing prices will definitely continue to rise, he added.

With a monthly salary of about 8,000 yuan, Dong is seeking a second home of about 80 square meters in the Yayuncun area, around the North Fourth Ring Road in Beijing. Prices of second hand homes in the area averaged 25,000 to 30,000 yuan per square meter.

He said housing prices in his target communities were around 20,000 yuan per square meter before the Spring Festival in February, and increased by 7,000 yuan per square meter during the recent two months.  "Despite and because of the fast price growth, I will buy soon if I can find a proper one," he said.

For people who are struggling to buy an apartment in cities, a big market correction will make their dream come true. However, for those who have bought apartments at high prices in recent years and for those who invest for profit, a crash would destroy their dream.