Bubble forming in the property maket of China: Mark Matthews

ET Now talks to Mark Matthews, Strategist, Macquarie Capital

Why are the Chinese being so draconian about their property market? They have a good bubble going. They can keep it going for a while. What's wrong?

China is as big as India. So when we speak of the Chinese property sector, there is a bubble forming in the luxury and for example Shanghai, Beijing, now Shanghai property prices are as expensive as London property prices, it is really very high and the authorities are concerned and rightly so that this pushes over into the mass market and then people cannot afford to buy their homes and so right now there is sort of this panic going on in China, everybody wants to buy property because they are worried that if they do not, they are going to miss it and it is going to go up and the rents will go up and they would not be able to spend all their money paying their rent, so they would rather own the property and that's why the government is stepping in and controlling it and they are very right to do that.