In recent years, mainland Chinese people have considered houses to be the best investment. However, the plunging property prices in recent years have shattered this belief. In a short period, property prices have been halved, making homebuyers realize that investing in real estate is a costly lesson. Recently, there have been numerous complaints on social media about the sharp decline in housing prices in Shanghai and Beijing.
On social media platforms, a blogger discussed the tragic figure of the Beijing real estate market, one of them being the “Hummingbird Community” (Hummingbird Garden). The houses in this community are extremely small but also very expensive, with prices exceeding 200,000 yuan per square meter.
The school corresponding to the Hummingbird Community is the prestigious Zhongguancun No.3 Middle School in Beijing. This signifies that it symbolizes the cheapest ticket needed for middle-class individuals to reach the top-notch school district.
During the high property prices, purchasing a property in the Hummingbird Garden was considered a game of seeking appreciation for the middle-class, and getting the child enrolled in the Zhongguancun No.3 Middle School was seen as a reward for participating in this game. For the middle-class, the soaring property prices and inflated confidence were too tempting, enough to overlook all its shortcomings.
However, this year, the situation took a sharp turn downward, with a property going down by millions from tens of millions of yuan. According to statistics from several industry insiders, the Hummingbird Garden was ranked first in terms of property price correction in Beijing in 2023. People woke up to the fact that what they had bought was not a resilient hard asset or a habitable house. Instead, it was merely the price paid for their children’s education.
Recently, a Chinese blogger, Qin Nian, reviewed the decline of the Hummingbird Garden in recent years. In May 2021, the Hummingbird Garden was considered the ceiling of the Beijing real estate market. A small apartment unit cost ten million yuan and was still difficult to acquire. However, by early 2022, the ten-million-yuan property dropped to 7.3 million, a decrease of 2.7 million. By December 2023, prices had continued to fall to 6.2 million, a further drop of 1.1 million.
In August 2024, prices plummeted to 5 million, cutting in half the value of a ten-million-yuan property. By October, it fell even further to 4.5 million, and the trend suggests that the bottom is nowhere in sight.
Recently, some landlords in the Hummingbird Garden could not sit still and raised the asking price to 5.8 million, but there were no takers. Qin Nian remarked that this was just one case, and the entire real estate market is collapsing. The sharp decline in property prices over the past two years has shattered the “faith” of many speculators.
“Some people believe that even if property prices fall, they can still live in the house. But with the burden of mortgages and no buyers in sight, homeowners are breaking down mentally. They are locked in by their mortgages, selling a house is almost impossible. Homeowners can only watch their wealth evaporate,” Qin Nian warned.
Many bloggers in Shanghai have taken to social media to complain about the property prices in Shanghai, with many saying they have dropped by 30%, causing many to lose their down payments. It is truly despairing.
Many Shanghai residents who bought houses in the past five years, especially in 2021, have shared their tragic experiences on social media.
One netizen shared the price fluctuations of a 75-square-meter property in Shanghai’s Pujiang area. In September 2018, the house was priced at 2.6 million, by November 2019 it had risen to 2.85 million, in December 2020 it peaked at 2.98 million, early 2021 saw it rise to 3.15 million, and by July it reached 3.55 million – a 36% increase in three years.
By March 2022, Shanghai experienced pandemic lockdowns and, following the reopening in June, there was an expectation of rising property prices. The 75-square-meter property in Pujiang was listed at 3.6 million, but the actual transactions were far from ideal and by November, they were hovering around 3 million.
In September 2023, Shanghai implemented the policy of “recognizing houses without recognizing loans,” but the market encountered a lack of liquidity despite price declines. The current transaction price for this type of property is only 2.5 million, lower than the 2018 price.
Some Shanghai netizens commented that in March 2021, property prices in Shanghai skyrocketed. Those who bought houses at that time have already paid off two years of mortgage, only to find that 30% of their investment has vanished. It’s a scenario causing much distress.
“This current property market situation is truly frustrating. Many people believed in various government policies and invested in houses over the years, only to be trapped now. Who will rescue these people? Their money is tied up in the real estate market, not only have they lost money, but their whole entity is at risk, still having to pay off mortgages with an uncertain future ahead.”