The Oriental Pearl Tower, Pudong, Shanghai, China

“What is today’s housing price?” This question is asked as frequently as “How are you?” in Shanghai, one of the biggest city in China. The housing price has always been a heated topic not only in Shanghai, but also in many other big cities in China such as Beijing and Guangzhou.

On October 7, my classmate Alice posted a blog about the ridiculous housing price in Shanghai. Based on the potential growth of Shanghai in ten years, she argued that residential property prices in shanghai will still increase dramatically.

However I disagree with Alice opinion. From my point of view, the housing price in Shanghai will increase in a declining rate and reach its peak based on two reasons.

1.The politic in China decides that housing market is not a free market but a government intervention one. This restricts the price of housing increase dramatically.

2.In real estate in China some of the economic boom appears attributable to a bubble. The housing price in Shanghai has already overwhelmed its real value. If the housing price keeps increasing in a increasing rate, it will lead to economic bubble burst and thus the housing price will then drop tremendously.