In the last year, China has undoubtedly been the undisputed protagonist on the international scene. Due to the Covid emergency, which had its epicenter in the city of Wuhan, the second largest economy in the world, it has been and continues to be in the crosshairs of scholars. But not only in the health and scientific fields. But also on an economic level. A power like that of China risks a bubble in the real estate market. In fact, for years he has feared this fear. But the pandemic emergency did nothing but speed up the pace. But how much can this risk materialize? To answer these questions, we decided to create a mini column dedicated to the topic. So if you're curious to know more, let's get started!

For those who are not experts in the sector, the real estate bubble means an '' unsustainable '' increase in house prices. This increase would in most cases cause a real collapse of the entire economic sector of reference. In this case, of course, real estate. We have seen how, initially, the real estate bubble risk seemed to have almost escaped when, in the areas most affected by the emergency, the houses on the market were literally sold off at bargain prices. A little to allow for a quick economic restart. A little because of the fear of having to pay fixed monthly taxes in such a critical and uncertain period. From here, however, interest in Chinese real estate by international portfolios has grown exponentially. Encouraged also by the opening of new construction sites. Testimony of the numerous and huge aid allocated by the Chinese government to revive its economy. Well, this meltin'pot has generated the classic '' domino '' effect.

To the point of generating a totally opposite situation. Once the original market was rebalanced, within a few months, the prices of houses and buildings exploded. Despite everything, however, new restrictive reforms have taken place to help this situation. Already existing in China at the real estate level. Indeed, the Chinese real estate market is permeated with numerous bureaucratic rigidities that make a continuum with this uncontrolled trend difficult.

But some scholars fear instead that, despite the presence of legislative limitations, the bursting of the bubble is certain. In addition to the increase in prices, it will also cause a very high rate of debt, as well as phenomena of illegal speculation. In fact, we remind you that unfortunately, in these cases, there is always a small percentage that, due to the risk of default, turns to illegal ramifications.

In conclusion, although there are two distinct and well-defined hypotheses of the practical implications of the Chinese situation, it is necessary to wait before giving an answer to the initial question. What is certain is that the second world economy will not be long in giving answers, given the speed of action that has always characterized this country. While waiting to discover the results of this survey, we recommend that you always stay up to date on our portal. Every day you will find lots of news on international real estate and how the entire globe is evolving! Always here, always with Realigro!