Developers in some Chinese cities have cut prices by up to 30 percent as demand for new housing plummets. Public anger has poured onto the streets despite official figures showing a still-healthy property sector.
Image: picture-alliance/dpa/imaginechina/D. Dong
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For the last two decades, property speculation in China has been a one-way bet. Take 57-year-old Shanghai businessman Tai Pei, for example. Having watched the Chinese real estate market grow for many years, he too was tempted to grab a slice of the incredible profits from the country's massive construction boom.
Tai bought three downtown apartments in China's commercial capital and made almost 10 million yuan (€1.27 million, $1.44 million) profit when he sold two of them sometime later.
At the beginning of this month, however, the developer of the apartment block where his third property is located suddenly dropped the price by a third, due to enquiries drying up. The abrupt change of fortune prompted many existing owners to protest outside the sales office, demanding compensation.
Developer cheated people
"Clearly the developer pushed up the price [of the flats] to cheat people when they already had plans to reduce them," Tai told DW.
He said the developer offered existing owners new cars or cash, but many investors, who took large bank loans to profit from flipping property over short periods, refused what they say is a derisory attempt to silence them.
The property protests have not been limited to Shanghai and, in some instances, have even turned violent. In Xiamen, in China's southeastern Fuijian province, anger spilled out on the streets after the price of one luxury villa was cut by 2 million yuan, having sold for more than 5 million a year earlier.
Such was the bitterness at the price drop, the developer — China's largest residential real estate company, Vanke — was pressured to pay out a million yuan in compensation to some 100 existing owners.
Similar protests in Shangrao, Xiamen, Guiyang, and Hangzhou saw property owners demand the return of their money from construction firms, amid fears their losses could be much larger than in a previous downturn in 2014.
New term for angry speculators
Property protests are becoming so regular in China that a new term has emerged on social media. "Fang Nao" literally means property trouble-making.
Asian cities are the world's most expensive for expats
If you are planning to relocate to Asia for work, get ready to open your wallet. Six of the top 10 costliest cities for expats are in Asia, according the annual cost of living ranking from the consulting firm Mercer.
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Beijing, China
Coming in as the ninth most expensive city is China's capital Beijing. Housing prices have been steadily increasing there over the past decade and international school fees are also expensive. The Mercer cost of living ranking is compiled to help multinational companies create compensation strategies for expat employees. The strengthening of the Chinese yuan pushed Chinese cities up on the list.
Image: Getty Images/F. Li
Shanghai, China
Shanghai is the most costly city on the Chinese mainland for expats and the seventh most expensive city overall. According to the website Expatistan, monthly rent for an 85 square-meter furnished apartment ranges from $2,170 to $1,200 (€1,800 - €1,030). Mercer said the rankings show "how currency fluctuation and shifts in the prices of goods and services" can affect expat purchasing power.
Image: picture-alliance/dpa/Yu Shenli
Seoul, South Korea
The capital of South Korea is the fifth most expensive city for expats. Foreigners and South Koreans alike can agree that coffee in Seoul is expensive. On average, a cup of coffee costs $10 (€8.60). The average price of a pair of blue jeans is almost $150 (€130). Mercer's survey measures the comparative cost of more than 200 items including meals, housing, transportation and clothing.
Image: Getty Images/AFP/E. Jones
Singapore
The Southeast Asian financial hub is the fourth most expensive city for expats and appears on many lists of the world's most expensive cities overall. You will pay more than $100 (€83) for jeans – double the price in New York. Gas is also expensive in the city-state, averaging over $2.00 (€1.70) per liter.
Image: picture-alliance/robertharding/G. Hellier
Tokyo, Japan
The Japanese capital with a population of over 9 million is the second most expensive city for expats. However, Mercer said that Japanese cities fell overall in ranking due to the weakening of Japanese yen against the US dollar. Still, rent for a furnished 85 square-meter apartment will range from $3,500 to $2,700 (€3,000- 2,300).
Image: Reuters/T. Hanai
Hong Kong
In 2018, Hong Kong was the most expensive city anywhere in the world for expats. According to Mercer, rent in this global business hub is at an all-time high, which is concerning for expats with families. Hong Kong also topped the list for gas prices and only Seoul has more expensive coffee. Non-Asian cities on the list included Bern and Zurich, Switzerland, N'Djamena, Chad and Luanda, Angola.
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Although official data suggests China's property market is up 7 percent over the past 12 months, and grew 1 percent in September alone, other figures suggest interest in new properties has recently fallen by almost a third.
While many analysts predict a mild dip in property prices over the next 12 months as a result of Chinese government measures to cool the market, the large discounts offered by many developers — sometimes more than a quarter of the original price — tell a different story.
"Fang Nao will become more regular," warned economist Tan Haojun recently in a blog post. "When that happens, things will spin out of control and may result in social unrest." He noted that many of China's major property developers are heavily indebted, and predicted that several could go bust if their income dries up quickly.
Tan sees the Chinese government intervening further to ensure property prices correct gradually. "If property prices drop by half, a [banking] crisis will break out for sure," he warned.
The shine appears to have come off the Chinese property market as developers slash the price of new build flatsImage: picture-alliance/dpa
'No wider crisis likely'
Iris Pang, Greater China economist for the Dutch bank ING, predicts a price correction of 5 to 10 percent over the next 12 months. But she still sees strong demand for property in China's largest cities and doesn't think real estate woes will drag down the rest of the economy.
"Jobs are still secure in China, [so] we don't see homeowners selling property and other assets because they can't repay mortgages," she told DW.
The Chinese government is expected to keep a tight lid on mortgage lending for at least the next year, said Zhang Hongwei, research director at Tospur Real Estate Consulting in Shanghai. "The government has become very experienced at handling the macroeconomic environment. [Adjustment] policies will be varied across different cities according to their individual needs," he told DW.
But even developers appear to have lost faith. The Reuters news agency cited Vanke Chairman Yu Liang as telling staff last month that "survival" was the ultimate goal for the developer over the next year, adding that the property market's "turning point has really arrived."
Soaring household debt in China
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Speculators chided on social media
Indebted Chinese property speculators can't necessarily count on much public support, now that the market has turned against them. "The price goes up, you are happy. The price goes down, you make trouble," wrote one person on Chinese social media platform Weibo, in response to the protests.
Others blamed speculators for causing a massive affordability issue for ordinary Chinese people trying to buy their first property.
"It's exactly these people who buy properties to speculate that have created the property bubble," another user wrote.
An editorial for the website Sina Finance, meanwhile, accused property investors of violating "the spirit of contracts" by protesting.
"After many years of a property bubble that has made many people rich, those [speculators] should realize that the period where property prices only went up and never the other way, is over."
Amid the realization that he may not make such large gains on his third property, Tai now agrees the era of big profits from property speculation is probably at an end.
"The economy is not doing well. Both the stock market and the property market are depressed. I think it's all reached a ceiling," he told DW.
Hong Kong-Zhuhai-Macau: China opens world's longest sea bridge
It took China about €15 billion and nine years to build the world's longest sea bridge, which connects two semi-autonomous cities of Hong Kong and Macau. But this architectural masterpiece is not without controversies.
Image: picture-alliance/dpa/MAXPPP
Above and under water
On October 23, 2018, Chinese President Xi Jinping inaugurated the 55-kilometer (34-mile)-long sea bridge that connects Hong Kong and Macau to the sprawling Pearl River delta economic zone via the Chinese mainland city of Zhuhai. The remarkable structure consists of a meandering bridge and a 6.7-kilometer underwater tunnel between two artificial islands.
Image: picture-alliance/AP Photo/Kin Cheung
Previous record holder
Previously, the 42-kilometer-long Jiaozhou Bay Bridge, or the Qingdao Bay Bridge, was the longest sea bridge. It is located in Shandong Peninsula and connects the cities of Qingdao and Huangdao.
Image: dapd
Parking islands
The Hong Kong-Macau sea bridge cost the Chinese government 120 billion yuan, equivalent to about €15 billion ($17.2 billion), and its construction took almost a decade. From this artificially created island in Hong Kong, the structure plunges under water. In addition, car and truck drivers can stop here. At least 60,000 cars and 250,000 people are estimated to use this connection daily.
Image: picture alliance/Zumapress
Expected economic boom
The Chinese government hopes that connecting Hong Kong and Macau to the Pearl River delta area would boost economic activity in the region. Until now residents of Zhuhai, Macau and Hong Kong have used ferries to commute between the three cities.
Image: AFP/Getty Images/A. Wallace
Time is money
At a speed of 100 kilometers per hour, the journey time between Hong Kong and Macau should be reduced from three hours by ferry to less than 30 minutes by car. But this is not a bridge anyone can just drive on — for now only the rich or politically well connected residents of Hong Kong and Macau will be able to take their private cars across the bridge.
Image: AFP/Getty Images/A. Wallace
Several delays
The bridge should have been officially inaugurated by the end of 2016, but it took longer than expected to open it. The bridge will be open to regular traffic from October 24, 2018. The structure will last up to at least 120 years and can also withstand typhoon winds of up to 340 kilometers per hour.
Image: AFP/Getty Images/A. Wallace
A steel and concrete giant
About 400,000 tons of steel was used in the construction of this gigantic bridge. That is 4.5 times more steel than what was used in building the Golden Gate Bridge in San Francisco. Chinese authorities say the bridge can not only withstand a magnitude-8 earthquake but also survive collisions with cargo ships.
Image: AFP/Getty Images/A. Wallace
Two driving systems
Border controls have been built on crossings in mainland China, Hong Kong and Macau. One of the problems that drivers face along the bridge deals with right- and left-hand driving systems. The drivers must also have two valid licenses to cross the bridge.
Image: picture alliance/dpa/Imaginechina
A controversial 'white elephant'
The construction of the bridge was delayed due to rising costs, fatal accidents of laborers and corruption allegations. Hong Kong residents fear Beijing will attempt to undermine their partial autonomy through this bridge. Environmentalists warn it would have a devastating impact on endangered pink dolphin species in the Pearl River estuary. Critics also say that the bridge is a waste of money.
