Hell hath no fury like a woman scorned or, it seems, like a Chinese real estate speculator who is losing money. After four years of talking (and not doing much) about cooling the hot-money speculation that is the Chinese real-estate bubble (mirroring the US equity market bubble since stock-ownership is low in China), the WSJ reports that the people are restless as the PBOC actually takes actions – and prices are falling. With new project prices down over 20%, ‘homeowners’ exclaim “return our hard-earned money” and “this is very unfair”– who could have seen this coming?
After a four-year campaign by the government to cool spiraling property prices, rises in home prices are starting to slow and in some smaller cities they are weakening.
Growth in average housing prices in 70 Chinese cities moderated in February for the second-straight month though they were still nearly 9% higher compared with a year ago.
But weaker economic growth, slower home sales and rising volumes of unsold houses have convinced developers in a number of cities to cut prices to raise cash quickly.
And new home prices are down…in smaller cities…
Property developers say privately there isn’t enough transparency in land sales and land use, which sometimes give rise to overbuilding in many smaller cities.
Phoenix Lake Garden, prices were cut by as much as 16%
According to property agency Soufun Holdings, Wharf cut prices of 20 apartments in the project to 8,200 yuan ($1,317) per square meter, down from the average 11,000 yuan per square meter it recorded in recent months.
Mr. Wu said he bought a 120-square-meter apartment in December, for 730,000 yuan. Prices are now 610,000 yuan for a similar apartment in the same tower
The drop in newer home prices hasn’t gone down well.
Groups of angry homeowners put up banners and demanded their money back after Hong Kong-listed property developer Wharf Ltd. cut prices
Around 20 homeowners picketed outside a property showroom in Changzhou Saturday, demanding to meet executives of the developer. They said they wanted their money back after prices at the project dropped
Meanwhile, there was also a small disturbance at a second project called Ambassador House in the same city after the same developer cut prices there.
Furniture at the showroom of Wharf’s Ambassador House was knocked over and the wooden stands for advertisements for the homes were flung on top of a model of the project.
Others said that as many as 100 people who had bought homes at the project had vented their frustrations outside the showroom over the past week.
