Finally, the Chinese real estate market seems to be stalling. It’s been a long run.

For almost 20 years, increases have occurred in construction and real estate prices across all of China. But development is starting to come back to earth as housing starts have decreased by 25 percent from a year ago.

Some economists are saying that the bubble has burst, something that could have severe economic and political implications.

The Chinese government put a series of policies in play in order to try to tame the ever-rising market. For starters, they’ve placed punitive interest rates on mortgages for second homes and a ban on buying third homes. Plus, the central bank has kept short-term interest rates well above the rate of inflation.

Not only has there been a delay in new projects – existing projects are being completed at a reduced speed as well. This has led to a slowing in both steel and cement output as well as retail sales.

Chinese economists believe that this downturn in the real estate market will most likely lead to considerable increases in nonperforming loans.

However, there is no need to worry about a shutdown such as the one that occurred in the U.S. in 2008. More than half of the homes in China were purchased over five years ago and real estate prices have doubled in that same time-frame. And Chinese families have a tendency to save – putting almost half of their income into a savings account.

Households in China have 66 percent of their assets in their homes, a much larger percentage than that of the U.S.