China’s economy continues to decline, with frequent property rights disputes in the real estate market. Recently, in Shanghai, owners of a luxury residential community took to the streets to protest against the continuous delays in handing over their properties, but they were met with violent suppression by the police. Netizens have described this as a “billionaire’s rights protection” spectacle in Shanghai. It’s reported that over three hundred owners have issued notices to collectively stop their mortgages.
On November 18, a viral video on the internet showed owners of Shanghai Suzhou Bay No. 1 rallying for their rights, only to be confronted by a large number of police officers who suppressed and dragged away several owners.
According to a video titled “100 Billionaires Protesting on the Streets” released by some self-media individuals, the reason behind these owners seeking justice is that the developer continuously delayed handing over the properties without any clear timeline, prompting the owners to collectively protest and demand refunds.
The video host mentioned that these owners purchased their houses in Suzhou Bay No. 1 in 2021 at a unit price of around 123,000 RMB per square meter, with each unit costing tens of millions of RMB, estimating the net worth of buyers to be “at least a billion.” The situation unfolding is indeed “quite unpleasant,” and it’s surprising to witness such events happening in Shanghai.
On the 16th, more than three hundred owners of Phase 1 of Suzhou Bay No. 1 in Shanghai issued a notice to collectively cease their mortgages.
A self-media account “Magic City Little House Brother” on the 17th revealed that this luxury residence, Anganan Garden, which was sold at 12.88 million RMB per square meter three years ago, has now transformed into Suzhou Bay No. 1, provoking the fury of the owners.
“Magic City Little House Brother” mentioned that some of his followers also bought property in Anganan Garden, with the contract stating that the properties should have been delivered by June 30. However, there has been no concrete information provided until now. Owners of other luxury residences purchased in 2021 have either already moved into their new homes or are in the process of renovation, while only Suzhou Bay No. 1 owners are left endlessly waiting. The real estate market in Shanghai is in dire straits, with numerous issues requiring urgent attention. For these owners who have been patiently waiting for three years, their distressed hearts have finally reached a breaking point.
Some netizens commented, “In fact, many luxury residential developments in Hangzhou are also neglected and complaints are fruitless! That’s why the owners took to the streets to assert their rights.”
Other netizens expressed concerns, saying, “Second-hand housing is already struggling, and now even high-end residential communities have lost confidence. What will support next year’s property prices?”
In materials posted online earlier by Suzhou Bay No. 1 owners, they accused the development of selling over 300 units in 2021 at a price of 12.88 million RMB per square meter, amounting to nearly tens of billions of RMB in sales revenue. Phase 1 of the project was initially scheduled for delivery on June 30, 2024, but due to reasons such as the pandemic and a disruption in the funding chain, the developer postponed the handover twice. Recently, owners learned that the developer and the construction firm, China State Construction Eighth Bureau, were embroiled in an “economic dispute,” leading to further delays with no certain date for delivery.
On November 11, mainland media released news about “Suzhou Bay No. 1, a luxury residential project in Shanghai’s core area, poised to enter the market,” indicating that the upcoming housing units in Suzhou Bay No. 1 range from approximately 136 to 537 square meters, featuring 3 to 4 bedrooms. The project is situated in a prime location in Suzhou Bay, just about 1.5 kilometers straight-line distance from the Bund and around 600 meters from Suzhou River. However, screenshots provided by the owners show that when asked about the delivery timeline, the real estate developer failed to provide a clear answer.
Over the past few decades, China has experienced a significant leap in its real estate market, as the Chinese Communist Party (CCP) heavily relied on reclaimed state-owned land for national land financial exploitation, ultimately resulting in a complete failure. In the last two years, with the economic slowdown and the debt crisis in real estate enterprises, a surge in unfinished construction projects has sparked protests. Many owners of such unfinished constructions have released public statements declaring their decision to stop mortgage payments, triggering a nationwide trend of halting loan repayments. The CCP government had no choice but to intervene forcefully, implementing measures to ensure completion and delivery of properties. However, the actual success rate of reviving these projects has been notably low.
According to statistics from the “China Dissent Monitor” project by Freedom House, protests, especially those related to the real estate crisis, have become increasingly frequent in China, accounting for 80% of the recorded public protests over the past year.
On October 12 this year, the Ministry of Finance of the CCP announced during a press conference that it allows designated debts to be used for land reserves and supports the acquisition of existing housing stock. However, local governments have shown a passive attitude towards purchasing existing housing stock.
Nezu Chief Economist at Nomura Securities China, Ting, stated at the end of September this year that the “guaranteeing delivery of Chinese real estate developers’ properties” policy should take precedence over the current inventory reduction policy implemented by the government, as the number of “unsold but unfinished” properties is 20 times higher compared to the “completed but unsold” properties. Ting estimated that there are approximately 20 million unfinished pre-sale properties in China.
Historical and cultural scholar Zhang Tianliang expressed that the turmoil in China’s real estate industry has triggered a chain of events, leading to the rise of corresponding rights protection movements, involving owners of unfinished buildings, investors who lost their capital and returns, and debt collectors who will follow suit. In recent years, many state-owned enterprises in China have established armed units for the purpose of dealing with debt collectors. The most likely crisis for the CCP regime is the emergence of debt collectors demanding repayment, which could extend to various sectors of the society.