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Crash can be avoided despite China's property bubble

The housing boom in the country is not a nationwide phenomenon, but a very concentrated problem in a handful of large cities.

Advertisement for a property development project in Zhengzhou in the background. The house-price-to-income ratio suggests the only places of bubble concerns are the four tier-1 cities, where house prices have risen to about 16 times of disposable income.

ONE of the bright spots in the Chinese economy this year has been the fast recovery of the housing market.

Nationwide house sales rose nearly 30 per cent for first eight months, and the average house price gained more than 7 per cent.

While supportive of economic growth and general...