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Furious Chinese Demand Money Back As Housing Bubble Pops
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?
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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Thanks for playing economics 101, jughead. But your paper is a failure. I suggest some extra reading, perhaps with Henry Hazlitt’s “Economics in One Lesson: the Shortest and Surest Way to Understand Basic Economics.”
I'm a little confused here. If they aren't speculators then what is the problem. They bought homes, go and live in the homes. Since they aren't speculators, they won't need to sell the house for many many years. By that time, their money *might* be there
And that gives the bankers the right to zap the value out of people’s houses? Right? Would you mind telling me your age because, actually, you are confused.
You're saying as long as a man has a place to live, what difference does it make what it’s worth, because it now develops that his house belongs to the banker bubble and that gives the banking cartel the right to erase its value. That's financial tyranny. If your house is not an object of value, then why would you want to own it? Have somebody else own it and rent.
The purchase of a house in a private market economy was based on its value and if just living in it was the only consideration, then only a fool would save for a down payment to buy a house, pay the mortgage, sacrifice for the upkeep and maintenance, pay the property taxes, and then lose all his equity and labors when he moves. FYI, the average stay in a house is seven years.
Children growing up were urged to save their money for the future, then their savings were targeted for that value by the bankers. Then, housing was a place for young people to start their estate, buying small and eventually working up to a larger, more comfortable house. Now, the bankers are there, to take that increased value and put it in their pockets by speculating with it in a high-risk game.
When savings are no longer safe, when housing is no longer safe, what makes you think that the bankers will let gold slip through their fingers?
“Each generation and country follows the same mirage. Each grasps for the same Dead Sea fruit that turns to dust and ashes in its mouth. For it is the nature of inflation to give birth to a thousand illusions.” – Henry Hazlitt
Paper money is tyranny.
These people must be the "Real Estate only goes up" crowd. I remember those folks all over any RE article in 2006. So that's where they went. They finally came out of hiding and now they are mad
Boy, that is a pretty expensive economics 101 course they are paying for
I payed with bitcoin. Let them eat cake.
AND the hot money flow begins to cool, raising tempertures everywhere. Hongcouver is next? Is it true they are starting a "Europeantown" there?
The corruption is worldwide with honest accountants driven out of jobs.
Buy a home in someplace stable like Iowa or Nebraska. What? You don't like corn?
They should start a Russian village since I'm sure the Russkies will be coming over the pole at any moment
"No Place for Honest Accountants" coming to a theater near you.
I don't know Chinese but maybe I can translate this into an Engrish equvilant using what I've picked up while eating at various Chinese resturants.
You No money have anymore. All Money gone Bye bye. You poor! you poor leave now!
By destroying the housing market, you destroy private wealth, the biggest single asset Americans have. Where are they going to go? The stock market?
The fact is that the American housing crash (and now China's?) wiped out massive sums of Americans'wealth, $7.38 trillion to be exact, destroying the borrowing and buying power of consumers, bringing on a still ongoing depression.
If no one is buying homes, construction and real estate related jobs disappear. Jobs are killed by the millions - at home and abroad.
The poverty trickle-down effect becomes a tsunami – even in China where no one is left to buy their Made for America products..
http://www.marketwatch.com/story/how-the-bubble-destroyed-the-middle-class-2011-07-08
The housing price increases from the mid 1990s on destroyed the middle class. Houses are a place to live and require a large amount of time and money for upkeep. The idea that really manifested itself in the early 2000s that your home was a ticket to Trumpville and an ATM, kept out all responsible people who chose to live within their means. The sheep couldn't wait to get in line in the hopes to be rich by living in some crap shack and flipping it to another member of the herd. A house should be cheaper to buy than rent and that is not the case in most areas. The whole market has become detached from the fundamentals and its original purpose of being a place to live. Housing as an investement is a myth propagated by the criminal NAR.
Chinamen have watched America's investor class pile into bad vehicles and ill advised stocks for years until 2008 blew up their fantastical dreams of riches, ONLY to see government and the Fed ride to the rescue of the losers and make them whole, NO, not only make them whole, BUT, then print trillions and make their useless investment choices boom and boom on printed money. Fuck, can you blame a China Man for demanding government make him whole! They saw the USA bailout every cunt banker and wanker and make them even richer for their poor business models and useless investment plans. Nope, people see, and then demand the same hand outs. America's bankers and investors are communists and government leeches. They have taken all the money and now are richer than before they fucking fucked up. Only government can reward losers, and Now China men want to be rewarded for stupid property investing. Why not they ask, the USA did it!
Fraud not blame caused the meltdown? Your neighbor still is your neighbor going on 10 years yet you blame your neighbor? You have worked the same job with the same people (your neighbor) for the same amount of time but yet believe that SOB cant pay HIS mortgage so we are all fucked? Stop projecting blame! My asshole is sore from what really happened and not what some third party convinced you with another FAD story? Blame victimless crime and move on YOUR NEIGHBOR has.
Your average Chinaman is just as dumb as your average Canadian.
Dengggg, chow wang!
<Anddd, it's gone! in mandarin>
No transparency in land deals and empty houses pulling down values? With all that gold and dollar collapsing no problem? West falls before China China people be happy in emptiness
I lucked out.
In July, it will be five years in my inherited free house.
Bank (Cuntrywide/BofA) started foreclosure in March 2010. Nothing since, though they do pay the property taxes (by law, I hear, but that may stop soon).
I sued bank in July 2013. Negotiating since, now, I've got them stalled out.
My feeling is that if RE in China, maybe Canada and the UK, crashes, there will be spill over effect in the US. Couple that with falling stock prices (watch the Dow, now between Fibonacci ratios 23.6-38.2 retracement) and rising interest rates (though I'm not sold on that yet) and look for housing prices to begin declining again.
Since the bank is, of course, a bank, they've got an insider's view on this, which explains a lot. They know they will likely lose in court if they proceed with their foreclosure (trust me, numerous ways, I've done the research and my father was a lawyer who taught me much), and now, with RE values falling, they're probably content with me just keeping the property intact and hoping for a better day (2019? 2025?).
Meanwhile, they may, at some point, decide it isn't worth paying the property taxes, which, since it's NY state, are substantial. If that happens, I know I will have won, and will be able to get the house F&C either through quiet title or because the statute of limitations has run out (March 29, 2016). Some cases have asserted that bank foreclosure action does NOT stop the SOL clock if the case is decided by failure to proceed or want of prosecution (same thing, different jargon).
So, I stand a very good chance of getting the house F&C for 0 money. Instant equity and I turn 62 in 21 months. Reverse mortgage could cover the property taxes easily, since they will only be on $17,000 value thanks to NY STAR program when I turn 65. I have no kids or heirs, so I pretty much can skate through retirement into death, whenever that may be.
Sorry if I bore anyone with this stuff, but it's just one example of how to beat the living shit out of the banks and the tax system by one guy who refused to give in to fear. Writing it out also helps me square with reality. I am sure there are many more examples like mine and I always advise people to research and fight like hell, using lawyers only as a last resort (I still don't have one, unless you count the bank attorney, whom I've tied up in knots.).
Good luck to everyone and thanks to they Tylers and ZH and the commentators for all the valuable insights and information.
Start a blog, start a business. Counsel people who might be in the same position. Good luck!
Me too. Been three years free but I pay taxes and insurance, upkeep. They used forged note, indorsement was missing, in the inital complaint. Well I have a copy of the note showing an indorsement where they did sell it. They are pretending they never sold off any rights. I countersued for summay judgment, dismissal and sanctions. They have not set a date for the hearing. That has been over a year. NOW the plaintiff's attorneys want to withdraw and come back in with their LLP identity! I will oppose that motion with some great case law...basically you can not witthdraw while facing sancitions for being a lying scumbag.
Yeah, this is boring to those not involved. This is my part, too, in fucking with the banks. I need three more years to get all the FRNs I put into this home.
The basic issue is the plaintiff has no standing as they sold "beneficial rights" to Freddie Mac and can not show those rights being sold back.
Research and time...it is true, will help in fighting the banksters. Glad they are incompetent.
From the freegold perspective this can be seen as people not having a stable Store of Value. Because the currencies of the world are unstable and not trustworthy, and because governments limit (and indeed force the people into certain approved investments) opportunities for investment....citizens of the world are getting crushed just trying to save for old age.
Governments do this because they want the power of controlling currencies and therefore control of the economy.
It will take a disaster of worldwide and enormous porportions to change this situations.
When the dust settles gold will likely emerge (again) as the preferred store of value. The price will have to be much higher.
Fuck
Anything
In
Range
F.A.I.R
Boo-Hoo, Wu.
They can always build more ghost towns in Africa
http://www.dailymail.co.uk/news/article-2168507/Footage-shows-brand-new-...
These guys are stupid on steroids.
Dumb-assess.
When it pops, we'll just make owning a home a requirement.
"ObamaHome™ aims to deliver on the long-standing American belief that all Americans deserve to own a home (and you WILL own one). Do you currently work less than 29.5 hours a week? Are you currently residing in a Section 8 rental? Would you like a home but have no down payment? Do you receive a sizable earned-income tax credit each year? If you answered yes to any of these questions chances are you could qualify for your own ObamaHome™ with nothing down."
HAHAHAHAHAHA
The Chinease sucker themselves as much as anybody else.
I wonder how many are pissed they can't leverage that home into a few BMW's.
HAHAHAHAHAHA! Welcome to the western financial system. Enjoy.
Do not believe a word about "shrewd" Chinese, they are as easily taken for a ride by TPTB as Americans are.
Are there sane people left in this world?
Yawn, this is has happened before even when prices were still going up rapidly. The price reductions are used to knock out the remaining units which are quite simply not as good. As initial buyers they got first pick, which means they are generally far better units than the remainder. The remainder sees a price cut to get rid of them, the initial buyers get pissy about it. This is nothing new, but it's all kinda bullshit.