Trouble comes knocking

26 October 2011 By John Foley Follow @johnsfoley

Property developer Longfor drew an angry mob after it seemed to cut prices on new Shanghai apartments by 25 percent. Though prices aren’t yet plunging across the country, it’s looking increasingly likely that they will. Angry scenes will become more common.

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Angry homeowners stormed the offices of Chinese property developer Longfor in a Shanghai suburb on Oct. 22, after it appeared to cut prices on a new property development by 25 percent. Local media reported around 300 protesters, though official numbers suggested the crowd was closer to 100.
The homebuyers, who had purchased properties in earlier phases of the project, felt they had been tricked when the average selling price fell from 18,500 yuan per square metre to 14,000 yuan, according to Shanghai Youth Daily. Longfor said the new units offered for sale had not been previously offered at higher prices.
The average selling price among top developers in China was 10,270 yuan per square metre at the end of the September, according to Daiwa Securities, 10 percent higher than in the first nine months of 2010. House prices in September were unchanged from a month earlier, according to official data.
Premier Wen Jiabao reminded local governments on Oct. 22 to apply Beijing’s increasingly tough controls on the property market. The southern city of Foshan in Guangdong was forced to scrap moves to ease curbs on home purchases on Oct. 13, just 12 hours after announcing them in an online circular.

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