A group of around 400 homeowners in Shanghai demonstrated publicly and damaged a showroom operated by their property developer after the company said it cut prices. Home buyers had wanted to speak with the developer to refund or cancel their contracts but were unsuccessful, according to local media. One report said the price cuts exceeded 25% per square meter.
The local media reports said an unspecified number of people were injured.
Chinese media separately reported that another group of Shanghai homeowners gathered on Saturday to speak with Longfor Properties Co., after it dropped asking prices to 14,000 yuan per square meter from 18,000 yuan per square meter at a residential development in the city’s Jiading district.
The Shanghai property-owner demonstration found little support on China’s Internet, where most still expressed worries that housing prices are too high.
The drop from 18,000 to 14,000 yuan is a 22% overnight drop and that is just a down payment on the carnage that is coming.
While at the same time in Hong Kong the worse is to come during the period 2012-2013 according To Barclays Capital:
"Hong Kong’s residential property prices would drop by 35 percent to 45 percent over the next two years in the “hard landing” scenario of a deflationary economic environment, Barclays Capital Research said.
In a “soft landing,” continued mortgage rate increases and a slowing economy would drive prices 25 percent to 30 percent lower over 2012 and 2013, Andrew Lawrence and Vivien Chan, analysts at Barclays, wrote in a report dated today."
Source
2 comments:
China has been aggressively targeting the property market so they have plenty of monetary policy easing to keep the machine going
But what about Europe? Has anything changed since last week when it looked like the Euro would be finished by Christmas?
Just shows that the manipulation of the interest rates of currency and giving out grants to municipalities for building projects is bound to fail - whether it is the old USSR dumping tons of money on concrete and building projects, China dumping money on municipal governments (and they in turn dump it to their crony buddies in the construction business), the US with forcing 1% interest rates and laws forcing banks to lend to people with no financial backing, or Finland...
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