Recently Vincent Lo the chairman of Shui On Group (developer of Xintandi) came out and stated that there is no property bubble and bascially there isn’t enough land on which to build in China. I don’t know if he was taking about land in general, available green/brown fields or cities that have land that is able to be developed profitably. He also said that developers where feeling the squeeze with government moves to curb rise housing prices and inflation. The other interest piece of information he gave was that 1/3 of buyers pay in cash for property – I knew that the figure was pretty big but 1/3 is huge when you think about the number of development properties changing hands on a yearly basis.
I think developers will push to become more involved as lenders to property buyers however, I can see the government pushing back as you quite easily under up with a sub-prime size situation with largest developers hitting the wall in a property market correction. Developers will continue on as there are so many development markets either untapped or under-invested in China such as tourism, retail, retirement, time-share, ski resorts, and so on but these will grow faster when then mainstream property developers profit margin drops as residential developments make and easy 35-55% profit (anecdotal).