Furious Chinese Demand Money Back As Housing Bubble Pops

Tyler Durden's picture




 

Hell hath no fury like a woman scorned or, it seems, like a Chinese real estate speculator who is losing money. After four years of talking (and not doing much) about cooling the hot-money speculation that is the Chinese real-estate bubble (mirroring the US equity market bubble since stock-ownership is low in China), the WSJ reports that the people are restless as the PBOC actually takes actions - and prices are falling. With new project prices down over 20%, 'homeowners' exclaim "return our hard-earned money" and "this is very unfair" - who could have seen this coming?

Via WSJ,

After a four-year campaign by the government to cool spiraling property prices, rises in home prices are starting to slow and in some smaller cities they are weakening.

 

Growth in average housing prices in 70 Chinese cities moderated in February for the second-straight month though they were still nearly 9% higher compared with a year ago.

 

But weaker economic growth, slower home sales and rising volumes of unsold houses have convinced developers in a number of cities to cut prices to raise cash quickly.

And new home prices are down...in smaller cities...

Property developers say privately there isn't enough transparency in land sales and land use, which sometimes give rise to overbuilding in many smaller cities.

 

Phoenix Lake Garden, prices were cut by as much as 16%

 

According to property agency Soufun Holdings, Wharf cut prices of 20 apartments in the project to 8,200 yuan ($1,317) per square meter, down from the average 11,000 yuan per square meter it recorded in recent months.

 

Mr. Wu said he bought a 120-square-meter apartment in December, for 730,000 yuan. Prices are now 610,000 yuan for a similar apartment in the same tower

The drop in newer home prices hasn't gone down well.

Groups of angry homeowners put up banners and demanded their money back after Hong Kong-listed property developer Wharf Ltd. cut prices

 

Around 20 homeowners picketed outside a property showroom in Changzhou Saturday, demanding to meet executives of the developer. They said they wanted their money back after prices at the project dropped

 

Meanwhile, there was also a small disturbance at a second project called Ambassador House in the same city after the same developer cut prices there.

 

Furniture at the showroom of Wharf's Ambassador House was knocked over and the wooden stands for advertisements for the homes were flung on top of a model of the project.

 

Others said that as many as 100 people who had bought homes at the project had vented their frustrations outside the showroom over the past week.

The complaints...

"Wharf, give us justice. Return us our hard earned money," read one of the banners, held up on bamboo poles outside the Phoenix Lake Garden showroom of a project for mid- to high-end apartments and villas.

 

"We aren't speculators. We just want an explanation from the developer," said one 35-year-old home buyer, who said he had bought an apartment and gave his surname as Wu. "This is very unfair."

Unfair indeed. How long before we hear they are "entitled" to a fair return on their housing (non) speculation investment? Alas for China's "non-speculators", as we reported last week in "The Music Just Ended: "Wealthy" Chinese Are Liquidating Offshore Luxury Homes In Scramble For Cash" the real anger is only just beginning.

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Mon, 03/24/2014 - 09:27 | 4585090 Rakshas
Rakshas's picture

Great Angry Asians......

 

....could be fun...

Mon, 03/24/2014 - 09:28 | 4585100 kaiserhoff
kaiserhoff's picture

Yeah, whys is that so damn funny?

  Prolly cause they are not always pissed, like the fembitches.

Mon, 03/24/2014 - 09:31 | 4585113 GetZeeGold
GetZeeGold's picture

 

 

If you build it.....the ghosts will come.

Mon, 03/24/2014 - 09:33 | 4585122 Headbanger
Headbanger's picture

FUKASHIT! FUKASHIT!

SUM TING WONG!

 

Mon, 03/24/2014 - 09:37 | 4585141 kaiserhoff
kaiserhoff's picture

Sons a beech.  Dat what you say?

Mon, 03/24/2014 - 09:48 | 4585158 TruthInSunshine
TruthInSunshine's picture

By the time this all fully unfolds, the units will be worth approximately the deposits put down (or less).

Sum Ting Wong, Indeed.

An epic crash lay ahead. Watch for falling boulders. Ghost banks, ghost cities, ghost flights...

Mon, 03/24/2014 - 09:50 | 4585179 The Limerick King
The Limerick King's picture

 

 

The bubble that China inflated

Is something that should be X-rated

A government con

A Satanic spawn

Like Ponzi & Keynes must have mated

Mon, 03/24/2014 - 10:00 | 4585219 Max Hunter
Max Hunter's picture

You go home now. You pay too much. Not my problem.

Mon, 03/24/2014 - 10:16 | 4585275 TruthInSunshine
TruthInSunshine's picture

You reave sales office now before I call porice.

You gweedy specurators. I not have to give money back. You stir owe many mirrions of yuan.

Rots of ruck, bitchez.

Mon, 03/24/2014 - 10:34 | 4585362 Son of Loki
Son of Loki's picture

There's a sucker born every minute, whether he's Chinese or American.

 

 

Mon, 03/24/2014 - 11:18 | 4585544 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

The unwind has begun! Expect this to take a year or more so to play out. Nothing is scarier to a Keynesian than the inability to print price inflating money.

Mon, 03/24/2014 - 11:25 | 4585579 Boris Alatovkrap
Boris Alatovkrap's picture

Wi bai hausu, pei phat moni, nau wan yu pei bak!

Mon, 03/24/2014 - 12:16 | 4585821 fockuyu
fockuyu's picture

Fockuyu, you always blowsing around never buy anyting white sons a beeches!

Mon, 03/24/2014 - 12:17 | 4585824 Troll Magnet
Troll Magnet's picture

Boris,

just how many languages do you speak?  You should be an ambassador! 

Mon, 03/24/2014 - 12:47 | 4585967 Four chan
Four chan's picture

they pitched the bitch, you never under any circumstances pitch the bitch.

Tue, 03/25/2014 - 02:03 | 4589022 Boris Alatovkrap
Boris Alatovkrap's picture

Boris is once live in China, in Harbin, old Russian city. Visit China in 1989 during Tian An Men.

Mon, 03/24/2014 - 10:29 | 4585343 Tall Tom
Tall Tom's picture

Shadow Bankers are now in a spot

Investors demand what they've got,

It is not about tellin

of the junk they've been sellin

Can they pay the interest or not?

Mon, 03/24/2014 - 11:28 | 4585595 bobola
bobola's picture

An overheated housing bubble pops

The last buyer says "You've busted my chops"

"Why me", they will say

And demand someone pay

"Nobody told me the price ever drops"

Mon, 03/24/2014 - 09:50 | 4585181 pemdas
pemdas's picture

The burnt customer certainly prefers to believe that he has been robbed rather than that he has been a fool on the advice of fools.

 

Mon, 03/24/2014 - 10:12 | 4585267 Canadian Dirtlump
Canadian Dirtlump's picture

For every specalutive parasite there is a low IQ buyer just as there was in the US debacle, Irish debacle, and hopefully any moment the forthcoming canadian debacle that has been years in the making. That part is sad.

 

I've been living in a tent near fonestar's and we are both eagerly awaiting the bloodletting.

Mon, 03/24/2014 - 11:44 | 4585661 shovelhead
shovelhead's picture

Wow.

Fonestar's mom tossed him out of the basement?

Mon, 03/24/2014 - 19:32 | 4587882 MillionDollarBoner_
MillionDollarBoner_'s picture

No...fonestar's mum tossed him OFF in the basement...but we won't go into that...

Mon, 03/24/2014 - 12:23 | 4585861 Zero Debt
Zero Debt's picture

Alas, those blogospheres spreading rumorisms and fearmongerizing the patriotistic leadership of the Homeland with their reckless blobbing ups of lies, lies and damn americanism lies. Such is the eternal nature of ignorant foreigizing and "tweeting up" of insincere propagandisms untrue to the unique inner Chinese growth characteristics. Through superior mannerisms China will uncompromising construct the biggest bad bank to the envy of the entire world for visiting to see, using her strong supply of labor and shovels and patriotic fervor and peaceful slogans and yellow-red bannerisms. The construction of the bad bank will stimulate the economy in eternity.

Mon, 03/24/2014 - 19:32 | 4587890 MillionDollarBoner_
MillionDollarBoner_'s picture

Ah...Ananonymous lives!

All is well with the world :O)

Mon, 03/24/2014 - 10:04 | 4585239 SilverRhino
SilverRhino's picture

Chinese bitching about how something is unfair and demanding the terms of a deal be altered.   ROFL.  

There's a reason an old mentor of mine (from the 50's) called the Chinese the Jews of the Orient.  

Mon, 03/24/2014 - 10:48 | 4585395 TruthInSunshine
TruthInSunshine's picture

The stereotype rings true: Chinese business people & even their Chinese attorneys will literally try & argue about whether there's even a contract in place (when there indisputably is) if a deal even begins to cause their side to lose money.

I will be looking at a witnessed, fully executed, notarized document, and will hear "[W]hat signature you speak of? We not sign any such document! You lie about this!"

Me: "I will be happy to email or fax you the copy of the original right now."

Them: "We not want to see such forgery!"

I've had debates that people don't believe occurred. Only by tape
recording conversations could I hope to prove that the words that were spoken really were.

Mon, 03/24/2014 - 14:22 | 4585677 SilverRhino
SilverRhino's picture

A-fucking-men .... I will never do business with mainlander Chinese.   

Correction:  Without LOTS of legal/extrajudicial backup from Taiwanese / HK guys that I know / trust.

Mon, 03/24/2014 - 11:50 | 4585684 soopy
soopy's picture

Yeah because they never do that in the States or other Western nations.

Mon, 03/24/2014 - 16:18 | 4586970 post turtle saver
post turtle saver's picture

get real soopy... again, the West isn't perfect but goddamned if that's even relevant to the reality of Chinese business & legal practices... after a few years of that y'all would crawl over a mile of broken glass naked to get back to the "corrupt" practices in the West

Tue, 03/25/2014 - 01:20 | 4588966 TruthInSunshine
TruthInSunshine's picture

soopy - I've never had an experience with any other people, and it's happened many times, and this is just one of an assorted number of examples I can cite, whereby two counterparty directly tells me that they didn't sign a document, witnessed & notarized, less than 48 hours earlier, relating to a relatively large deal.

I'm talking about them flatly denying they signed a fundamental, important document, and refusing my offer to fax or email them a copy of it, merely continuing deny that any such thing happened.

It's surreal.

The other common occurrence is when they try to argue that a clearly written, unambiguous & important section of a document that they signed means the opposite of what it does (not a slightly or significantly different meaning, mind you - but the opposite one).

And they do this with a straight face, while projecting an indignant anger. Again, it's surreal.

I really like the Chinese, generally speaking, and find them hospitable (if a tad stand-offish at first), but in terms of the business context, they operate in truly bizarre ways.

Mon, 03/24/2014 - 14:27 | 4586416 Antifaschistische
Antifaschistische's picture

I'll add some spice to that TIS.   I agree with the ultimate valuation estimation.

When I was in a city last year I had a few days to just poke around Guiyang, where the average annual income is below $4,000 US per/year.  I thought Guiyang was a nice example of real China.   But the small, I mean small "apartment/condo's" were being sold for $130,000 US.    I wouldn't pay $130,000 for that condo anywhere in the US.  And prices only went up from there.   How could these places be selling for 30x average annual income.  When you think about that 30x number, you realize the prices were staggering.

Mon, 03/24/2014 - 15:15 | 4586663 TruthInSunshine
TruthInSunshine's picture

All major league property developers were very close "friends" of Chinese communist party members and have gotten all the loans they want from regional Chinese banks to build a ridonkulous amount of residential and commercial properties, totally unecessary, all over China.

The units/properties were being marketed as a " can't lose/get rich quick" scheme all over China, with the blessing of Provincial Officials, even.

The central authorities have only begun cracking down on the corruption, which is why you see so many wealthy Chinese either fleeing China or jailed, and why the central authorities have now put pressure on law enforcement to literally babysit the regional banks and even the PBoC.

This is part of the reason why China has printed 15 trillion in absolute fiat during the last 5 years, much of which was leveraged up into shady and highly speculative real estate developments, and which now has a created a massively multiplied ocean of septic debt.

Mon, 03/24/2014 - 20:13 | 4588071 Antifaschistische
Antifaschistische's picture

...and I forgot to mention this.   They're selling these apartments on the street corner with 5 young guys in suits with very pretty brochures.   When I asked them, in my fractured Mandarin, "Can American buy this house"....they all looked at each other, talked among themselves for about two minutes, and they one guy who remembered a little bit from his High School English class came back to me with the verdict "yes".   The message was so clear..."you give me money, I take money, we'll work out the details later".

Mon, 03/24/2014 - 09:38 | 4585143 wallstreetapost...
wallstreetaposteriori's picture

They really are going to pissed and buring shit down when prices really start to fall.  What do you think they will do if prices fell by 90 percent..... c'mon economic depression in China... your years of self-richtoues views need to be put back in there place.

Mon, 03/24/2014 - 09:47 | 4585169 fonestar
fonestar's picture

Go away.  Nobody cares about what you think.

Mon, 03/24/2014 - 09:59 | 4585215 Dr. Engali
Dr. Engali's picture

"Go away.  Nobody cares about what you think".

 

Says the junk king.

Mon, 03/24/2014 - 10:15 | 4585283 fonestar
fonestar's picture

The junk is being put to good use.

Mon, 03/24/2014 - 10:25 | 4585325 pods
pods's picture

And one day that dog is going to maul you when you sleep.

pods

Mon, 03/24/2014 - 13:30 | 4586121 walküre
walküre's picture

Wait? Does junking you create a new currency? Junk Coin?

Mon, 03/24/2014 - 10:30 | 4585347 zuuma
zuuma's picture

I freely admit that the popping Chinese bubble and all its manifestations have become a sizzling, juicy, medium-rare slice of schadenfreude for many of us. Mmmmmmmmmm... fork tender.

I'm savoring it. But before we get too involved in fantasy land, let's take a minute to remember that at least China IS POPPING their bubble.

We are still pumping ours. China will have a hard landing, shake off the punches, re-set and be back up & growing just as we get around to finally, maybe popping ours.

Then who will have the last laugh? I secretly wish the reverse were true. That we would have our big reset, wallow a bit & finally get back to a truly growing economy -- while the Middle Kingdom blows theirs to infinity.

Sadly, that cannot be until January 2017.

And if the FSA votes in hillary -- never.

Mon, 03/24/2014 - 10:37 | 4585370 BandGap
BandGap's picture

My question becomes - if this contines does it spread outside of China? Obviously there will be some overlap with US markets.

If the US intentionally popped any one of thei numerous bubbles I believe it would just start a chain reaction, first domestically, then globally.

Mon, 03/24/2014 - 10:07 | 4585251 BandGap
BandGap's picture

I found some bitcoins in te parking lot yesterday. I'm going to put them in the roll with the other pennies. I hope the bank doesn't notice.

Mon, 03/24/2014 - 10:17 | 4585290 fonestar
fonestar's picture

Well that would be dumb seeing as how 1 BTC would buy you 1120 rolls of pennies.

Mon, 03/24/2014 - 10:27 | 4585337 BandGap
BandGap's picture

Can we be friends? Friends will be better than money soon. Do you know how to shoot a rifle? Clean one? Those are the best friends a guy can have.

 

Mon, 03/24/2014 - 10:47 | 4585398 Tall Tom
Tall Tom's picture

I am pretty sure that he does know that. Check out his You Tube Channel...

 

https://www.youtube.com/user/weihrauchfan1999

Mon, 03/24/2014 - 10:58 | 4585443 BandGap
BandGap's picture

Coooooool! Not keen on the Mauser but I do have an extra Mosin and plenty of ammo if you like to shoot antiques. The surplus ammo I have goes right through 1/4" steel plating. Fun stuff.

Let's be buddies, I don't want any of your coins, though.

Mon, 03/24/2014 - 11:25 | 4585561 fonestar
fonestar's picture

Yes become buddies with fonestar. 

fonestar is locked and loaded and has some more Yugoslavian SKS on the way (traded for some junk silver).

Mon, 03/24/2014 - 11:40 | 4585652 Tall Tom
Tall Tom's picture

I have enjoyed your Gun Videos. You are quite a character.

Mon, 03/24/2014 - 19:05 | 4587783 Sirius Wonderblast
Sirius Wonderblast's picture

Weihrauch really are very good...

Mon, 03/24/2014 - 12:02 | 4585733 wallstreetapost...
wallstreetaposteriori's picture

Hahahahha... You still make my day. Everytime I see a post by you I think... man.. thank god I am not that guy. 

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