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What is the first thing you do when you have an extra million or ten? If you are like most people you go and buy a luxury vacation home. But that would also be the first to go when you realise your business won't be going to the moon quite as fast as originally expected. The second phase of that is currently going on in China's "tropical paradise" of Hainan where prices are down 28% year-on-year (see Bloomberg article).
Vacation property is the first to go down when the market starts turning. Consider the fate of Miami in the US, Greece and Spain in Europe. Usually the rest tends to follow, especially in a market that has gone much too high by any fundamental measure. Official statistics out a few days ago showed that property prices in most Chinese cities are now also dropping. Beware the super-bubble.
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