China’s First-Tier Cities’ Worst Fear Realized: Housing Prices Plummet 75% With No Bottom in Sight

China's real estate market is still crashing, with sales and construction in trouble. Recently, a topic about a property in Wuqing, Tianjin dropping from 1.6 million to 390,000 yuan trended on social media, sparking heated discussions.
According to Chinese media, the property experiencing a steep drop is the First New Beijing Peninsula project in Tianjin. A local real estate agent said the project was most popular from 2016 to early 2017, with high-rise units selling for 20,000 yuan per square meter. An 83-square-meter apartment cost around 1.6 million yuan. Now, new homes are priced at 7,000 yuan per square meter, and similar second-hand homes cost 400,000 to 500,000 yuan per unit. It's not unusual for very urgent sales to drop to 390,000 yuan.
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[hanknyc]

Still overpriced when you consider construction quality, quality of life, population density, pollution, average salaries, and restrictions on personal freedom.

[cstephen]

Sadly, based on how much they overbuilt, the inventory is probably only worth 10% of what people paid for them

[piotrmajewski]

It's still too expensive too pay that much for house you "own" for 75 years.

[borisnegrarosa]

I saw this coming back in 2010 when I was living in China. My Chinese friends didn't feel comfortable when I told them my opinion. They thought housing prices would never drop.

[Ghekko-kwzz]

There are 15 year olds who would make smarter dictators.

[acheable]

Went up 100% so price dropped 75% is still high. Owners occupying units no reasons to worry.

[billienomates]

Crashing literally and figuratively from what I have seen of their crumbling concrete and not just buildings, highways etc.

[HHH-nvxb]

Housing needs to proportional to people's income. Here in the USA, it is starting to become out of reach in many areas.

[RatTerminator]

Why would anyone pay Anything for Tofu construction😮

[EduardQualls]

The simple fact is that the CCP's real-estate industry has already built enough houses for a population approaching 2 billion, but that population, itself, is on a downwards slide past 900 million (and could reach 800 million by 2030), crushing real-estate demand. The housing-price crash and the population crash are connected, and one will exacerbate and accelerate the other. As personal wealth shrinks and spending decreases, employment will also shrink, faster than either R/E prices or population, feeding backwards, into both. The CCP has created an economic black hole, and the rest of the world will no longer help it dump money into that abyss. You cannot expect a country, where 900 million people survive on c. US $275 a month to spend its way out of a great depression.

[Stephen-crsc]

Considering the construction quality in China, you couldn't pay me to risk my life living in any of these properties.

[cacogenicist]

Most of these recently built, tofu-dregs high-rises should be torn down with mortgages nullified, and replaced with tree-planted parks.

[jean-emmanuelrotzetter]

When a few years ago I checked a few price prices in several countries, I was shocked about the prices in China.
Even when comparisons are not easy when it comes to construction quality - the prices were partially higher than in expensive cities in Europe with much, much higher incomes.
Part of the real estate market looked like a kind of immense Ponzi scheme

[HKim]

I bet Pooh Bear's family sold their properties years ago.

[timbo]

Its called supply and demand - something even the CCP can only control for so long.

[leapdrive]

China is learning first hand that artificial prices do not hold. They should let the market dictate the prices of items - lesson learned for marketing.

[p.d.stanhope]

Rent before buying is almost universal axiom. Warren Buffett would warn people to never go into debt for your first investment via a mortgage. He married his first wife in 1952, but delayed purchasing a house until 1957 once he got his investment business was making net profits. At the age of 94, Buffett still owns his original house in Omaha with some "spending" money. 😉

[jqwoo]

House price 500K = 100K real value + 400K corruption value!

[leanderrowe]

The only best way is to let the market speak, let property price falls to fair market value where buyers would step in. That could very well mean more bigger drop.

[kennyadvocat]

The 99 year lease makes it hard for me to value any apartment. And people were paying for apartments that weren't even built yet. If you live in the apartment for your whole life 40-50 years, will it have any value to pass down to your grand-kid? People here in nyc that got handed down a condo back when they were still cheap did well for themselves. China government doesn't want to let this happen. If the building doesn't fall down after 50 years it will be hard to sell a property with only 49 years left on the land lease. This is why so many Chinese pool their money together and buy land here in America.