Expert: China housing market risks grow

A leading property expert says China's property market is now being driven by speculation and investment rather than real housing demand, creating risks similar to the US.

Nie Meisheng, the Chairwoman of the Real Estate Chamber of All-China Federation of Industry of Commerce, says the leverage on bank loans has become very high, adding to the threat. As the global financial crisis began, China launched a number of favorable policies to stimulate housing demand which have been very successful.

Beijing and Shanghai's property prices easily reached a peak in July and are continuing to rise. Developers have also enjoyed much easier bank loans.

Nie warns developers and policy makers that the financial crisis was triggered by the sub-prime mortgage crisis in the US. She says the Chinese housing market risks heading in the same direction.