The bubble has done much harm to society but government efforts to curb the hike in house prices appear to be working

There may have been doubts there was a real estate bubble in China a few years ago, but it is obvious now. The average house price has tripled between 2005 and 2009. In some cities like Shanghai and Beijing, house prices increased by more than 40 percent in 2009 alone, and an additional 30 percent in 2010. The prices in both cities are now ridiculously high, while the rent to price ratio is much less than the deposit rate and the average family needs to work decades to afford a small apartment.

A real estate bubble is not only an economic problem, it is also a social disease that can do a great deal of harm and a ticking economic time bomb.