In a time of stagnation in the Chinese real estate market, the once booming luxury housing market in Shenzhen, known for only going up, is now facing the dilemma of falling prices, leaving homeowners in distress.
30-year-old Jinjin purchased a 180-square-meter luxury home in downtown Shenzhen. At its peak, the total price was over 30 million yuan, with Jinjin stating, “It was bought by my father as a pre-wedding gift for me. He paid the down payment and repaid the loan. Now, my husband, children, and I live here. The current value of the house is around 27 million yuan.”
Jinjin mentioned that she purchased the house in 2018 and moved in in 2020. The price per square meter was around 110,000 yuan initially and rose continuously, reaching close to 180,000 yuan per square meter at its peak. Currently, it has dropped to around 150,000 yuan per square meter.
In recent years of living here, Jinjin noted a general decrease in housing prices. She observed that fellow homeowners were highly sensitive to the shrinking value of their assets and would engage in a “housing price defense battle” at any sign of movement in the market.
In one instance, a homeowner in the community shared the selling information of a property at over 140,000 yuan per square meter in the homeowner group. Someone quickly commented, “I’ll offer more than 1 million as the price difference, don’t sell it cheap.” While likely a joke, it highlighted the nervousness surrounding price fluctuations.
Jinjin mentioned that those who treat multi-million-dollar luxury homes as investments are called “speculative housing groups.” The moment a property is listed for sale, they would immediately share the unit number and price in the group chat. If the price is too low, members of these groups may even visit the homeowner and negotiate, emphasizing the importance of not lowering the property’s value.
She further stated that their community favored internal transactions. If a property was for sale, some homeowners would directly purchase it or enlist relatives and friends to buy it in an effort to stabilize housing prices. This practice is not limited to their community, as Jinjin has heard of many luxury residential areas adopting similar strategies in the past two years.
Jinjin’s experience is not a singular case but rather a collective effort within the high-asset population in Shenzhen to safeguard their assets in the face of devaluation.
Earlier this year, 31-year-old Yuèliang and her husband purchased a 100-square-meter marital home in Shenzhen for a total of around 12 million yuan, now reduced to about 10 million yuan.
Undoubtedly, this was the largest expenditure in Yuèliang’s life, exhausting all her previous savings at once. She studied transportation engineering and initially worked in a private company in a second-tier city earning only a few thousand yuan. In late 2018, she switched jobs to an internet company in Shenzhen as a product manager, and during the internet boom, her income increased rapidly.
After purchasing the house, she posted on social media, “A girl from a rural single-parent family saved up 3 million at 30 and entered a big company, really turning her life around.”
However, just a few months after buying the house, she was informed by the agency that the transaction price of a property identical to hers had dropped by nearly 200,000 yuan. “I’m really upset,” she said helplessly. Not only did the housing prices drop, but the dreamy bubble of the internet was gradually bursting. While her job hadn’t been directly impacted, she felt a growing sense of crisis, making career advancements and pay raises seem more difficult in the past two years.
In recent years, the Shenzhen real estate market, particularly the luxury housing sector, has witnessed significant price fluctuations. In February of this year, reports of “50% clearance sales” reached Shenzhen’s core area apartments, once again drawing market attention. Several agents and real estate professionals posted about clearances of various luxury apartment in Shenzhen on social media platforms.
Furthermore, in a certain luxury residential area in the Shekou district, a 328 square meter property was sold for 55 million yuan in October 2023, but by November, the selling price dropped to 47 million yuan, marking an 8 million yuan decrease.
Luxury housing prices in the Shekou Bay area have also declined. In June 2024, a 313 square meter lower-level east-facing apartment in Shekou Bay No.1 was sold for only 50.5 million yuan, approximately 160,000 yuan per square meter, hitting a new low in nearly four years.
These price reductions reflect the adjustment trend in the Shenzhen luxury housing market. In the past few years, prices in the Shenzhen luxury housing market steadily climbed, with some high-end properties reaching up to 290,000 yuan per square meter. However, with changes in market supply and demand dynamics and the influence of policy controls, certain luxury housing prices have begun to fall.