Reuters reports on China. "Home sales in the red-hot property markets of Shanghai and Shenzhen tumbled sharply in the week after authorities made it tougher to buy homes in the cities to prevent a property bubble, surveys by a major Chinese realtor show. After Shenzhen and Shanghai property prices had jumped 57 percent and 20.6 percent in February from a year earlier, local governments tightened downpayment requirements for second homes and raised the eligibility bar for non-residents to buy in the cities."

"In the week beginning March 28, the first after the new rules took effect, the total floor area sold in Shanghai fell 60 percent from the previous week to 283,600 square metres, according to nationwide agency Hopefluent Real Properties (China), whose surveys are based largely on government data. Shenzhen sales fell 28.2 percent to 71,000 square metres."

"Prices also eased 3 percent week on week in Shanghai and 4.2 percent in Shenzhen, according to the surveys. 'A lot of people don't want to get into the market now, so they're not buying. This is giving me a headache,' said 56-year old Ding Xiaoping, a furniture salesman who is trying to sell two of his apartments. 'Many sellers are thinking about cutting prices. I'm thinking of lowering the price by a little, too.'"

"'China's property investment in the first two months was doing better than our full-year forecast of a 5 percent drop,' Nomura chief China economist Zhou Yang told Reuters. 'We expect both sales and investment in the coming two quarters will remain robust, but the second half is likely to ease on housing recovery slowdown, affected by tightening in the first tiers and glut in the third and fourth tier (cities).'"

The South China Morning Post on Hong Kong. "Recent poor sales at some private residential projects as well as a subsidised development indicate rich and not so rich homebuyers are staying out of the market, pushing up expectations that a price correction could accelerate. On Saturday, Mantin Heights in Ho Man Tin, built by Kerry Properties, became the third private project to see disappointing sales, with just 31 per cent – 34 units out of 108 – sold at the luxury residential project in the first two days following their launch."

"Wong Leung-sing, associate director of research at Centaline Property Agency, said the failure of the subsidised housing project to drum up sales despite being offered at affordable prices would negatively affect overall market sentiment. 'The majority of these eligible buyers decided to abandon their purchase rights as they expect home prices will fall further,' he said."

"Flats at De Novo were offered at 20 per cent discount to prevailing market prices. In the private residential market, defaults have been rising for both mass-market and luxury homes, especially in Ho Man Tin and Yuen Long. 'But developers did not slow down the launch pace,' said Alfred Lau, a property analyst at Bocom, adding they had instead opted to offer more favourable terms and prices in an attempt to attract buyers. 'We believe developers will accelerate turnover even at the cost of lower margin, rather than sitting on the land bank, given the abundant pipeline and pessimistic outlook,' he said."

"Individual owners have joined the price cuts in a bid to speed up sales. with more secondary market transactions concluded at bargain prices. Herman Po, a senior sales manager at Hong Kong Property’s Taikoo Shing branch, said a 598 sq ft unit at Po Shan Mansion, Taikoo Shing, had changed hands for HK$7.8 million, or HK$13,043 per square foot. 'The vendor offered the unit for HK$9 million in December but only found a buyer after reducing the asking prices by HK$1.2 million,' he said."

The Epoch Times. "China has a huge real estate bubble, yet Chinese economists and the government still don’t seem to have a clear understanding of the damage, and continue to infuse more credit into sectors related to real estate. New loans of 2.51 trillion yuan ($387 billion) have been issued in January, the highest single month on record, and the growth rate of M2 monetary supply increased 14 percent, the highest in 18 months, according to data released by China’s Central Bank."

"The majority of these loans went to individual mortgages, affordable housing developments, land development, government projects, transportation, and wholesale and retail trade —with three areas directly related to real estate. So, who are the buyers of expensive real estate in major Chinese cities? One businessman, who has bought dozens of houses, said the price of real estate in first-tier cities has skyrocketed because rich bosses have closed their companies and factories and have invested cash in real estate. Running a real business is extremely tiresome, full of risks and responsibilities, and profits are less than gains from real estate investments, he said."

"According to Ren Zhiqiang, the Chinese real estate mogul whose remarks recently brought down official wrath, the Chinese real estate market is designed to build houses for the rich, so they can buy houses for investments. In other words, this round of China’s real estate upsurge is not because of an actual demand for housing, but solely because of speculation by rich people with few investment opportunities."

"However, regardless of the reason, when houses are sold, the government makes money from selling land, banks earn interest from loans, and real estate companies make commissions. It is a prosperity cycle based on credit. As long as banks continue to provide loans, those with money can make use of it and play the investment game."

"Overall, long-term high real estate costs have a detrimental effect on business, reduce urban employment opportunities, and reduce government revenue. Pouring more credit into the real estate sector has only further inflated the bubble and broadened the wealth gap."

"When poor people have trouble making ends meet and hope for lower rents, does it make sense to lend money to the wealthy to speculate and make a big fortune in real estate? When small and medium enterprises need funds to maintain their operations, does it make sense to pump money into the real estate sector that will hike up the costs for small and medium enterprises? Real estate speculation does not improve the economy or the lives of the majority of people."