Awdry: China's tier one cities trapped in property bubbles

Major Chinese cities are trapped in a property bubble after sales transactions soared 60% over the past 18 months, says Gartmore's Charlie Awdry.

The manager of the £802m China Opportunities fund says the level of purchases in tier one cities such as Beijing and Shanghai, fuelled by buyers looking to make a quick profit, is pushing the asset class into a bubble. “Property prices in tier one are 10 times cheaper and people are buying 15 times more as they are looking for profit, which puts it within bubble territory,” he says. “The Chinese are buying it because bank interest rates are 2% and inflation is 5% so there is no incentive to save. It is inevitable this money will be transferred into the property market and real estate....