In recent days, the crisis in the Chinese real estate market has continued to worsen, as evidenced by recent cases from Guangdong, Anhui, and other areas. The sharp decline in property prices has not only led to violent conflicts between old homeowners and developers but also resulted in the devastating shrinkage of lifelong savings for middle-class families.
Financial blogger “Huihu” stated on October 3 that during the recent National Day holiday, he received videos and letters from fans in Guangdong Zhongshan and his hometown, Hefei, Anhui.
The videos showed a sales office in a property in Zhongshan, Guangdong being smashed.
He revealed that in 2023, the unit price of the property was 18,000 yuan per square meter with no room for negotiation. However, during this year’s National Day holiday, the same property was being sold for over 7,000 yuan per square meter at the sales office. For the homeowners who had already purchased properties, this was seen as a “humiliation.” Unable to bear what they perceived as a “collapse of the sky,” many homeowners resorted to throwing bricks at the sales office.
Over the past few years, incidents of “smashing sales offices” in various parts of China have starkly reflected the extreme anger and despair of old homeowners facing the sudden evaporation of their assets.
In August of this year, a netizen from Guangdong exposed that at the Tang’an Garden Phase 2 residential development beside Tianhe Park, the developer suddenly reduced prices, leading the old homeowners to collectively protest at the sales office, unable to accept the change.
Images provided by the netizen showed a large group of old homeowners gathering at the sales office expressing their dissatisfaction. In just one year, housing prices plummeted from over 40,000 yuan per square meter to below 20,000 yuan, a drop of over 50%.
Publicly available information shows that in August, the second-hand housing price on a certain platform in Tang’an Garden Phase 2 was 16,775 yuan per square meter, which aligns closely with the netizen’s report.
Faced with the decline in property prices, some media reported on August 13 that seven real estate projects in Guangzhou promised to “compensate the price drop” with a maximum of 200,000 yuan in property fees, requiring homeowners to provide “valid materials” to prove the decrease in property prices.
In April 2024, Interface News reported that due to emotions running high, homeowners smashed the sales office of “Dianjian Longyue Chang’an” in Wuhan, Hubei, leading to chaos at the site.
For the past year and a half, property prices in Wuhan’s “Dianjian Longyue Chang’an” project have continuously dropped, with a decrease of 1,000 yuan per square meter compared to the first launch price, selling in 2024 even lower than the land price by 1,111 yuan per square meter. Upon hearing the news of further price drops, old homeowners angrily smashed the sales office.
A market source in Wuhan remarked that the Dianjian Longyue Chang’an project, located within the Han River Inner Loop, was unaffordable for first-time buyers, who had to look for properties outside the third ring road.
In August last year, a netizen exposed that due to a drastic drop in house prices, another sales office in Shenzhen was targeted for smashing. Homeowners were emotionally charged, and security guards found it difficult to stop them as they overturned the entrance to the sales office.
If the drop in property prices triggered social conflicts, failed investments in commercial real estate could directly lead to the financial collapse of middle-class families. A tragic example from a family of a university teacher in Hefei, Anhui, illustrates the impact.
According to “Huihu,” he recently received a submission from a fellow villager in Hefei, Anhui. The submission narrated how a property destroyed two generations and two families. The parents of the submitter, both university teachers in Hefei, invested nearly ten million yuan in a commercial property in Binhu New District in 2022, nearing retirement. The submission emphasized that this was their lifelong savings.
The submitter expressed how devaluation of the accumulated money would affect the children and their own retirement. The commercial property, as an asset meant to be passed down to the son as a legacy, was seen as a long-term investment. In 2022, an agent calculated a conservative estimation of rental income, projecting approximately 360,000 yuan per year for a 100-square-meter property, with expectations of rising rents and property prices over time due to Hefei’s development. Convinced by these prospects, the elderly couple decided to purchase the property.
During the recent National Day holiday, the submitter conducted a survey and discovered that the rental income of the commercial property had dropped by 40% from 2022. Such a drastic decline in a little over three years was distressing. The most worrisome aspect for them was that currently, no one was willing to rent the property even at a reduced rate, and after finding a tenant who rented for a few months, the business could not sustain and had to leave, despite the lease being at least two years.
The submitter revealed some distressing details: the property was equipped for food facilities with gas stoves, and after tenants left, they had to dispose of three gas stoves.
Given the circumstances, the submitter now seriously considers selling the property, but the agent suggested a price of 4 million yuan. However, over three months since listing, no potential buyers have shown interest, not even inquiries about the property.
“The current advice from the agent is to further reduce the price by another 1 million yuan, preparing for a bottom line of 2 million yuan for the deal. In this scenario, a loss of at least 7 to 8 million yuan over the past three years is inevitable,” the submitter expressed, fearing the impact of revealing the true situation to his parents would likely lead to depression and mental breakdown.