BEIJING - Standing in the shouting tumult of a Chinese real estate fair, Chen Shiyong said it seemed he was watching a suicidal man on top of a building ignoring the pleas of bystanders to pull back from the edge.
Not that many of the 142,000 potential buyers and curious visitors, who crowded into Beijing's latest big housing property sales fair over the weekend, were buying Chen's warning of the impending collapse of the property bubble.
Many said l housing prices in the Chinese capital and other cities would surely continue to rise, perhaps after a brief dip, shrugging off government efforts to cool the market. The disheartened said prices, which are already well beyond their grasp, are unlikely to come down.
"Nobody is listening to the government leaders. There's this mentality that has set in that this is a no-loss market," Chen said, nodding at the crowds around miniature building displays in Beijing's China World Trade Center.
"It's like watching a suicidal man who won't listen to anyone. Whatever you tell him, it simply strengthens his notion that he's right and the rest are wrong," said Chen, an investment analyst for Changjiang Securities.
The Chinese government shares some of his jitters.
Over the weekend, the top bank regulator, Liu Mingkang, said the country's banks must do more to rein in risky lending to land developers.
The average selling price of properties of seven major developers on the mainland increased from 8,069 yuan ($1,182) per square meter in November last year to 10,810 yuan in March, the Royal Bank of Scotland said in a report on Monday.
Some plots in downtown Beijing recently fetched record prices, bought up by State-owned companies with core businesses that have nothing to do with real estate.
But for every pessimist at the fair, there seemed to be dozens of potential buyers who could give several reasons to back their belief that China's property market is unlikely to slow much, especially in the big cities.
What optimists, pessimists and rattled would-be home-buyers at the real estate fair generally shared was a belief that the central government lacked either the tools or the will to dramatically tame home price growth .
As Beijing tries to cool the market, the widespread assumption of government weakness could itself become a problem.
"I think prices will keep growing. The government can act if it really wants to. But it will require guts," said Wang Jun, an engineer attending the fair. "Doing that will hurt a lot of interests, including local governments that need land revenue."
He said he earns about 70,000 yuan a year, about as much as it costs to buy 2 sq m of a new apartment somewhere close to central Beijing.
"If prices keep rising like they have, then ordinary residents won't be able afford anything. Even middle-class people will be squeezed out and that could be dangerous," said Wang.
Potential buyers read brochures and talk to sales staff in front of a model depicting a new housing estate at the Beijing Property Trade Fair April 9, 2010.[Photo/Agencies]
Liu, the bank chief, said the government had "enough bullets" to ward off risks from property fever, but small-time investors such as Zhang Xixiong have so far proven to be wily prey.
Zhang was working his way around the display booths at the Beijing fair, searching for another apartment to buy, on top of the three he already owns.
The government's efforts to tighten credit and mortgage requirements for non-owner-occupiers have not bitten deeply so far, said Zhang. He brushed aside the latest warnings about an overheated market.
"In the end, the demand is still there. I don't think government controls can play that much of a role," said Zhang.
Urbanization, the home-buying aspirations of the nation's young middle class and the sheer amount of untethered wealth sloshing around the country will keep pushing up housing demand and prices in Beijing and other big cities, he said.
"I'm looking to sell one of my places and I get serious calls about it at all hours, even after midnight," said Zhang.
This year's spring real estate fair at the Beijing World Trade Center sold property worth 2.9 billion yuan, the Beijing Youth Daily reported on Monday.
That was a dip from last year, when the organizers reported sales worth 3.2 billion yuan. Crowds were also down this year, the paper said.