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Property values in Shanghai are plunging as developers lower their asking prices in an effort to sell into a weakening housing market. It's good news for some, suggesting efforts by authorities to cool the overheated housing market are working. But recent buyers are outraged as the value of their investments fall, sometimes by more than 25 percent.
China's property market is slowing and developers are slashing prices to sell new apartments. It's angering those who bought property in the same building at higher prices.
Real estate agents say the value of some apartments has fallen by more than 25 percent—dealing a major blow to some people's investment savings.
About 400 homeowners protested in Shanghai on the weekend after several developers lowered their selling prices. They demanded a refund, and damaged the showroom of developer China Overseas Holdings Ltd when they didn't get it.
Shanghai real estate agent Ms. Qu said some apartment blocks were worth 260 US dollars per square feet, but dropped to 190 dollars after developers slashed their prices.
[Ms. Chu, Real Estate Agent]:
"They worked hard to earn money to buy property, but not long after they bought it, it crashed this much. Of course they feel anxious."
Lawyers said a drop in property prices was not a legal basis for owners to demand a refund.
The price drop suggest measures by authorities to cool demand—such as cutting bank lending and limiting the purchase of second homes—are working.
But some like investment bank UBS are predicting the property market will undergo a "hard landing" in the next few years, according to the Washington Post. That would have major ramifications for the Chinese economy.
Ben Yang
