http://www.businessweek.com/news/2011-11-2...r-on-curbs.html

“A lot of the city’s entrepreneurs invested in the property market with the capital they earned from their own business,” Mizuho’s Shen said. “With the tightening of credit, they started to sell off properties.”

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Added on November 21, 2011, 8:41 am
as long as the rental can support the monthly bank loan after 10% down payment, it still consider save...  and vise versa.

true story?

My opinion - he may have 3 options then;
1) Wait for correction-Accept the fact that property have increased unnaturally....
3) Wait for auction property in the same place- Keep his fingers crossed...
3) Go for a substitute property - Buy a cheaper property elsewhere and save the agony once for all. Have more money for other things in life...

Once there was a little island country. The land of this country was the tiny island itself. The total money in circulation was 2 dollars as there were only two pieces of 1 dollar coins circulating around.
1) There were 3 citizens living on this island country. A owned the land. B and C each owned 1 dollar.
2) B decided to purchase the land from A for 1 dollar. So, now A and C own 1 dollar each while B owned a piece of land that is worth 1 dollar.
- The net asset of the country now = 3 dollars.
3) Now C thought that since there is only one piece of land in the country, and land is non producible asset, its value must definitely go up. So, he borrowed 1 dollar from A, and together with his own 1 dollar, he bought the land from B for 2 dollars.
- A has a loan to C of 1 dollar, so his net asset is 1 dollar.
- B sold his land and got 2 dollars, so his net asset is 2 dollars.
- C owned the piece of land worth 2 dollars but with his 1 dollar debt to A, his net residual asset is 1 dollar.
- Thus, the net asset of the country = 4 dollars.
4) A saw that the land he once owned has risen in value. He regretted having sold it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollars from B and acquired the land back from C for 3 dollars. The payment is by 2 dollars cash (which he borrowed) and cancellation of the 1 dollar loan to C. As a result, A now owned a piece of land that is worth 3 dollars. But since he owed B 2 dollars, his net asset is 1 dollar.
- B loaned 2 dollars to A. So his net asset is 2 dollars.
- C now has the 2 coins. His net asset is also 2 dollars.
- The net asset of the country = 5 dollars. A bubble is building up.
(5) B saw that the value of land kept rising. He also wanted to own the land. So he bought the land from A for 4 dollars. The payment is by borrowing 2 dollars from C, and cancellation of his 2 dollars loan to A.
- As a result, A has got his debt cleared and he got the 2 coins. His net asset is 2 dollars.
- B owned a piece of land that is worth 4 dollars, but since he has a debt of 2 dollars with C, his net Asset is 2 dollars.
- C loaned 2 dollars to B, so his net asset is 2 dollars.
- The net asset of the country = 6 dollars; even though, the country has only one piece of land and 2 Dollars in circulation.
(6) Everybody has made money and everybody felt happy and prosperous.
(7) One day an evil wind blew, and an evil thought came to C’s mind. “Hey, what if the land price stop going up, how could B repay my loan. There is only 2 dollars in circulation, and, I think after all the land that B owns is worth at most only 1 dollar, and no more.”
(8) A also thought the same way.
(9) Nobody wanted to buy land anymore.
- So, in the end, A owns the 2 dollar coins, his net asset is 2 dollars.
- B owed C 2 dollars and the land he owned which he thought worth 4 dollars is now 1 dollar. So his net asset is only 1 dollar.
- C has a loan of 2 dollars to B. But it is a bad debt. Although his net asset is still 2 dollars, his heart is palpitating.
- The net asset of the country = 3 dollars again.
(10) So, who has stolen the 3 dollars from the country? Of course, before the bubble burst B thought his land was worth 4 dollars. Actually, right before the collapse, the net asset of the country was 6 dollars on paper. B’s net asset is still 2 dollars, his heart is palpitating.
(11) B had no choice but to declare bankruptcy. C as to relinquish his 2 dollars bad debt to B, but in return he acquired the land which is worth 1 dollar now.
- A owns the 2 coins; his net asset is 2 dollars.
- B is bankrupt; his net asset is 0 dollar. (He lost everything)
- C got no choice but end up with a land worth only 1 dollar
- The net asset of the country is again = 3 dollars.

The story didn't end here...

The more people talk about price can crash, the chance of it crash become low.

The crash often come when most people cannot forsee it.

This is always repeating and proven.

Because when more people wary or cautious crash may around the corner, it means those people are out of excessive speculation.
It is always excessive speculation that causing the bubble and lead to crash afterwards.

I will deeply worry if no one talk about crash, and everyone said BBB.

When people stop buying, market only stagnates or maybe goes down a little bit because people still have holding power and hope for rebound.

Crash will happen when all around people are getting retrenched, losing their jobs, companies are going bankrupt, stockmarket also falling at the same time. Because prices only crash when there are many forced sales with no buyers.

If he can't afford to pay with his salary, how come he can still get loan? This prove that bank has become irresponsible lender. Your friend also act irresponsibly and this of course will lead to downfall of property market.
Nothing to fear if we still have jobs that pay well.

heard & see with your own eyes is different thing, unless is flat or using joint name.
If the normal working person can own that many units, he sure hell know how to borrow from banks or he earn mega salary.