One of the classical problems associated with emerging property markets is the idea of volatility. In other words, it can sometimes be difficult to gauge emerging property markets because of the fact that they can go up and down very quickly depending on what the latest thing that has happened in the country is.
In China, this principle appears to have been driven home to roost as many of country's top real estate property firms appear to be tanking lately in the acquisitions and in the stock market. It is as of yet unclear how widespread these problems are, but in at least one case the tanking of the firm has led to drastic changes in the way it does business.
Chuanghui is one of the largest private real estate firms in the country and as a result of the slowdown that has been slowly gripping the Chinese property market in response to announcements of investigation and possible regulation by the government, they have posted massive losses recently. These losses have forced the company to close 1000 of the 1800 outlets they have across the country because of the real estate market falling apart and many analysts say that it seems as if Chuanghui has gone into desperation mode in order to try and stay out of the red.
Zhang Min, a representative of the company, blamed the government regulation put in place recently that was specifically intended to cool the real estate market. The government felt that the creation of a bubble was a bigger concern than forcibly cooling the market down and according to Min it is a worry that has resulted in the destruction of many Chinese real estate sectors.
"The market has taken a turn for the worse," Min said. "And our deals have dropped a lot."
