It's worth checking out a few blog posts from FT Alphaville on the state of the UK and Chinese housing markets.
The first flags up UK house price gloom, citing a Morgan Stanley report that forecasts a 10% fall in house prices by the end of 2012.
The second set looks at the Chinese housing market. An FT Alphaville post flags up the rising housing inventories in China, citing one forecast for 15 months of inventory by the end of this year. The analysis points out that some cities have a 7-year inventory of unsold property.
The kicker comes from an FT article on the importance of the Chinese real estate market to the global economy. According to the article, China accounts for 50% of global commodity consumption. But two-thirds of China's steel demand, for example, comes from the real estate market.
If construction slows in response to rising inventories and official concerns for inflation, then commodity price rises could ease. But as the article points out:
"Whether China's real estate market is a bubble that could pop, knocking out Chinese growth and shaking the world's economy, is a question that is being asked by everyone from Brazilian iron ore traders to hedge fund managers in the City of London.
And while there is no consensus among economists and analysts over whether rapid price rises and a big construction boom do constitute a bubble, there is serious concern among some Chinese officials and recognition from almost everybody that the current levels of growth are unsustainable over the long term."