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June 12, 2006

In China, sizzling housing prices dazzle and distress

A real estate frenzy grips Chinas urban areas, and one recent day saleswoman Xu Shuang faced an unruly throng when units at her luxury housing project went on the block. You should have seen it. More than 1,000 people gathered outside, Xu said. Amid flying elbows and chaos, the sales crew set up a lottery system to attend to customers, letting in a handful at a time. Many signed purchase agreements for anything put before them. It was kind of chaotic, Xu said. People selected their apartments in a great hurry. They didnt give much thought to the floor or the location. Chinas sizzling real estate market is anything but normal and orderly. Hordes of buyers often flood showrooms when new properties hit the market, eager to throw down cash. Pent-up demand, rising incomes and a paucity of affordable housing have driven prices up sharply in major cities, leaving some middle-class buyers feeling squeezed out and angry.

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