Falling home prices spark protests by homeowners

Some homebuyers want to block an expressway in Ningbo, Zhejiang province, on the evening of May 4. About 400 homeowners broke into the sales office of property company Baoyi Real Assets and smashed it up as developers slashed home prices without compensating earlier buyers. [Photo/ China Daily]

More homeowners in East China's Zhejiang province are protesting, as developers slash home prices without compensating earlier buyers.

Discounts offered to attract new buyers already set off protests at three property companies in Hangzhou last week. Homeowners gathered in the sales offices, holding up signs and funeral wreaths from May 3 to 5 asking for compensation.

There have been nearly 20 similar protests in Hangzhou this year, local media reported on Monday.

The Beijing Times said the three developers slashed their prices from 2,000 yuan to 4,000 yuan ($320 to $640) a square meter.

"I bought my apartment for 12,600 yuan per square meter in August, but it is 8,800 yuan per square meter now. I lost more than 200,000 yuan in less than half a year. How can I accept that?" a homeowner named Liu said at a protest last week in Hangzhou, according to the newspaper.

None of the three property companies could be reached for comment on Monday.

Last week in the Zhenhai district of Ningbo, also in Zhejiang, about 400 home-owners broke into the sales office of a property company named Baoyi Real Assets and smashed it up. Angry buyers even wanted to block the expressway to draw the attention of the local government, but were persuaded to give up by the police.

"The price cut was a result of the central government's policy. We understand the earlier buyers, but we can't do anything," said a worker from Baoyi's sales office who declined to give her name.

"It is a mega trend that the housing price is going down. No one guarantees that the property will appreciate. It's so normal the price goes down, like stocks," she said.

"You are an adult, and you should be responsible for your own decision. Why didn't you stand up when housing prices went up?" a netizen named Xiao Bai said.

Qiu Shi, a lawyer at He and Partners Law Firm in Nanjing, said there are differences of opinion in legal circles.

Most say that both the buyers and the developers should stick to their contracts. As long as the contracts are legal, there is no reason for the buyers to ask for refund or compensation if price goes down, he said.

"However, some lawyers point out that housing is different from general goods as they usually cost a family's life savings. More consideration or flexibility should be given in handling such disputes, to preserve social order," he said.

Tension between homeowners and developers keeps building up as the nation tightens control over the property industry. Several protests by homeowners erupted in big cities including Shanghai last year, when property prices began to cool down. Events in Hangzhou and Ningbo suggest the trend is continuing and that metropolitan real estate markets are still subject to bubbles.

A report from the China Index Academy in April showed that the average home price in 100 cities dropped for the first time on both a monthly and yearly basis since China initiated its new round of housing market control measures in April 2010. The measures include tighter lending policies, higher down payments, bans on third-home purchases, property tax trials and a greater supply of low-income housing.

Meanwhile, home prices dropped 2.6 percent year-on-year to 15,391 yuan a square meter in 10 major Chinese cities - Beijing, Shanghai, Shenzhen, Guangzhou, Suzhou, Hangzhou, Chengdu, Tianjin, Nanjing and Chongqing.

xieyu@chinadaily.com.cn