Declining Shanghai property sales spark price cuts, protests

SHANGHAI/HONG KONG: Property sales in Shanghai, the most populous city in China, have fallen by more than a tenth over the first nine months of the year, prompting developers to cut prices and in some cases sparking protests.

Sales of commercial properties in Shanghai including offices, residential and commercial buildings dropped 13.1% in January through September from a year earlier to 13.07 million square metres, data from the Shanghai Statistics department showed.

Sales of residential properties in the city fell at a steeper rate of 14.9% in the first nine months to 10.63 million sq m, the department said in a statement posted on its website.

Facing increasingly tight liquidity conditions, swelling inventory and slowing sales, more Chinese developers have moved to cut prices to lure customers.

But the price cuts have angered homeowners who bought their homes before they were instituted.

Hundreds of angry homeowners stormed the sales office of a property project in Shanghai's Jiading district on Oct 22, demanding a refund as prices of the development have fallen by up to one-third since they made their purchases, the Shanghai Youth Daily reported earlier this week, without naming the developer.

Similar cases have been reported elsewhere in the city, where home prices have skyrocketed in recent years.

In Pudong, the financial district, hundreds of customers of China Overseas Property (Group) Co protested at the developer's head office over the weekend as home prices at one of its projects were cut by nearly 30% in a sales promotion, the Shanghai Daily reported earlier this week.

Earlier this month, a similar scene was staged at the head office of Jingrui Properties, when about a hundred homeowners gathered to protest after the Shanghai-based developer lowered prices for a project in Taicang near Shanghai by up to 20% during a 15-day promotion period, according to local media reports.

Developers including Jingrui Properties had so far refused to give in to homeowners' requests for refunds or cancellation of purchases, saying such demands had no legal basis, the reports said.

Average housing inflation in 70 major Chinese cities dipped to 3.5% in September from a year earlier, down from August's 4.1%, according to Reuters calculations based on official data published this month. — Reuters