China Can't Afford to Let Its Housing Bubble Pop

Bloomberg reports:

Among the many reasons to dismiss President Xi Jinping's pledges to transform China's growth model, Gan Li may offer the best: an epic housing bubble that can't be allowed to pop.

Gan, a professor at Southwestern University of Finance and Economics in Chengdu, Sichuan and at Texas A&M University in College Station, Texas, recently crunched some disturbing numbers on the level and distribution of household income and wealth. After examining survey results from 28,000 households and 100,000 individuals, Gan believes that roughly 65 percent of China’s household wealth is sitting in real estate.

An astounding 90 percent of households in nation of more than 1.3 billion people already owns homes. In the first half 2012, he found, about 42 percent of demand for properties came from buyers who already owned at least one. Many of these homes and apartments, it goes without saying, were bought in the midst of one of history's biggest real estate booms and bubbles.

90% ! It's difficult to get higher than that.