An­gry mobs show all is not well in China’s toppy prop­erty sec­tor

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Home buy­ers — an­gry that apart­ments are be­ing sold for much less than they paid — swamped prop­erty de­vel­op­ers’ mar­ket­ing of­fices across China over the Golden Week hol­i­day, de­mand­ing their money back.

A sales cen­tre for Xinzhou Man­sion, a project of Coun­try Gar­den Hold­ings Co lo­cated in Shangrao, a city in Jiangxi prov­ince, was mobbed last Thurs­day, videos and pic­tures cir­cu­lated on so­cial me­dia show, its win­dows smashed by scores of protesters throw­ing rocks. They’re fu­ri­ous that Coun­try Gar­den is sell­ing units for prices around 30pc lower than a year ago.

Sim­i­lar demon­stra­tions took place at One Man­sion in Shang­hai, an­other of Coun­try Gar­den’s projects. There, apart­ments are go­ing for as much as 25pc less than two months ear­lier. At Zhangzhou, a city in south­east­ern Fu­jian prov­ince, peo­ple protested out­side the of­fices of a Ron­shine China Hold­ings Ltd. project, wav­ing ban­ners that called the firm an “un­scrupu­lous de­vel­oper”.

Coun­try Gar­den cut the sell­ing price at one of its res­i­den­tial de­vel­op­ments by one third. Those who paid full price smashed the sales of­fice. Sim­i­lar in­ci­dents had hap­pened be­fore, and will again. It’s im­pos­si­ble to re­move the guar­an­tee of prin­ci­pal in China.

China’s Golden Week is typ­i­cally a buoy­ant pe­riod for new-home sales as hol­i­day mak­ers get out and spend. But trans­ac­tions this year were the low­est since at least 2014, ac­cord­ing to China Se­cu­ri­ties Co, with much of the weak­ness felt in third-tier cities. Of­fi­cial home-sales data for Oc­to­ber is due next week.

The un­rest is a fur­ther sign that China’s toppy prop­erty mar­ket is be­gin­ning to cool. Firms in the na­tion are al­ready of­fer­ing free lux­ury cars and hefty re­duc­tions to shift stock, the dis­counts sug­gest­ing debt-laden de­vel­op­ers are pulling out all stops to raise rev­enue. The sec­tor faces a record $23bn ma­tu­rity wall in the first quar­ter of 2019 and Bei­jing’s at­tempts to keep a lid on home prices have made it harder for com­pa­nies to gen­er­ate swift cash from sales.

The dis­counts be­ing of­fered to would-be pur­chasers of Coun­try Gar­den’s project in Shangrao are only for se­cond-time home buy­ers, ac­cord­ing to a Coun­try Gar­den me­dia of­fi­cial who asked not to be named, cit­ing com­pany pol­icy. In Shang­hai, the price cuts are only for projects in poorer ar­eas, she said by phone Mon­day.

An­gry mob: Home buy­ers — fu­ri­ous that apart­ments are be­ing sold for as much as 30pc less than they paid — have held protests in Shangrao and Shang­hai (pic­tured)

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