Re-Examining the Chinese Property Market: Deflating Bubble Fear

In economics, a so-called bubble is any deviation of an asset's market price from its intrinsic value. Such deviations can be driven by a range of irrationally exuberant and speculative behavior: overly confident views of the future, rampant optimism, bandwagon effects, herd mentality, or a misplaced faith in one genius as an investor. Whether the Chinese property market represents a bubble of epic proportions hinges upon the nature of the demand. Do the country?s sky-high property prices reflec...