Quick buck not so easy for speculators
BUYERS of property in China appear to have been finding out the hard way about the eventual direction of what goes up.
Falling prices have yet to rip the market apart, but those who were buying for quick profits must now think in terms of long-term appreciation, rather than easy money.
In a market as young and uncertain as southern China property, it had to be expected that there would be setbacks and pitfalls.
The biggest long-term risk is, of course, availability of land. To Hong Kong buyers, used to a strictly limited supply that has virtually guaranteed rising prices, the concept of almost infinite space is difficult to grasp.
It was always possible, nevertheless, that an easily generated supply would swamp demand and push prices down.
Ironically, the austerity programme could well set a limit on supply in the near term, as property projects are curbed on the orders of Beijing.
Offsetting this will be other policies severely curtailing the amount of money available inside China for the end-user of luxury residential properties.
What the authorities are obviously, and properly, anxious to do is to clamp down on the pure speculation that has been going on in properties - the very thing that has been attracting Hong Kong buyers to this market.
In the territory, many buyers have been combining the desire to make a profit with the need to seal themselves off from constant rent increases. Those who have bought for their own use, and not stretched their finances to breaking point, can ride out anyfall in prices comfortable in the knowledge that they have a home as well as a long-term investment.
Those who bought in China were, in most cases, doing so with both eyes on a quick buck. The failure of prices to soar is going to cause some of them a lot of pain. Let's hope it isn't passed on to the banking system.
The more immediate lesson is that in a country where real estate has been an alien concept since 1949 there were bound to be dangerous gaps in legislation, which would be exploited to the disadvantage of buyers.
Old property hands will remember the orange grove swindles of Florida, and the southern Spain holiday home scams, and be careful to get watertight legal agreements on any property investments in China.