Construction boom reaches China's small cities

Bengbu, China

LUXURY lakeside homes and high-rise condominiums are coming up fast in China's sleepy inland town of Bengbu, a clear sign that a home-buying frenzy sweeping across the country's major metropolises and provincial capitals has reached even its smaller cities.

The increase in demand is welcome news for smaller cities that have a massive overhang of unsold houses left from the last real estate downturn three years ago. However, the surge in construction threatens to outpace or match the increased demand for housing, leaving inventories untouched.