We're still a long way off bottom

Wherever you go, they rise dramatically from the mud and piling. Even now, with the crunch on and property prices on the slide, they seem just as active.

Some things never change in Shanghai and an obsession with property is one of them. Apart from political breaks, it's been everyone's favourite speculation for 150 years.

But recently the monster has run out of steam. Last year was very difficult for commercial and residential. Prices dropped and transaction volumes shrank. And that was before the full extent of the world economic crisis had sunk in.

The government has been pulling out all the stops to revive the housing market. But, as with the stock market, it tends to blow hot and cold.

It wants to promote home ownership at the bottom end while not encouraging the speculative top slice. It wants prices strong, yet affordable. Not surprisingly, its efforts haven't been very successful.

The irritating thing about markets is that they have a will of their own. Governments can only chip away at the edges. Tax and transactions cost-savings packages have helped but the real problem is falling prices.

Very few deals are being done as nobody can see the bottom. Of course there are some bright spots. The outer suburbs are having a revival. Prices are lower and with the Tube system worming its way closer, living further out is not such an imposition.

But is the bottom in sight? Commentators don't think so. Sam Crispin, who has observed the Shanghai market for 20 years, sees improvement towards the end of the year.

Even with falling interest rates, that will seem a very long way off for many.

The week after the New Year holiday is always quiet but the Ox did manage to have some bovine influence on the stock market.

The index was up 8.6% on the week with gains in four of the five trading days. The government will be pleased. In the current climate, it needs some feelgood news.

In a move to help the car industry, the government has introduced a trade-in scheme.

Scrap an old car and buy a new environment-friendly one and a nice cash incentive awaits you. Perhaps it should extend the scheme to bankers?