The National bureau of Statistics in China released the results of a nationwide index of urban property prices. According to this survey, the price of property in China fell on the average during the previous month of June. It’s the first time that his has happened in the last 16 months. This may be welcome relief as we see the cooling effects of government policies to try and cool down the overheating property market in an attempt to avoid what may be a developing real estate bubble in China. The coverage of the data on property rates covers about 70 major cities and indicates a very slight drop in average property prices even if these are still over 11% more than the previous year.

Are we seeing a cooling property market in Beijing? I don’t think so. I believe this is artificial as the current supply of real estate there still does not meet the demand of a rapidly growing urban population in it’s major cities which in the end will not discourage would-be speculators or investors that are looking to invest in real estate for rental income. However, if this is indeed a bubble, then it is an increasingly dangerous property bubble. Let’s see what happens next.

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