Protests against falling house prices selfish

Given the widespread concern about rising housing prices, it would have been natural to expect the recent decline in housing prices to have been greeted with some celebration, but that has not entirely been the case.

Although the National Bureau of Statistics' data on housing prices in dozens of domestic cities was still stably high in September, traditionally known as "golden September" in the industry, as it is the month that housing sells best, its performance was poor compared to what it has been in recent years.

According to a research report released by China International Capital Corporation, sales of new commercial housing in 60 cities only increased 1 percent in September over sales the month before, which is remarkably lower than the figure over the past seven years when housing sales have increased 8 percent month-on-month in September on average.

Real estate developers responded quickly to the sluggish real estate market by cutting housing prices to promote sales. Just before the National Day holiday, the leading domestic real estate developer Wanke was selling more than 100 villas at almost half the original price in a new residential project in Xiamen, Fujian province. And Country Garden, another leading domestic real estate developer also cut the price of its commercial housing in many cities, from first tier to fourth tier, in September.

But the developers' voluntary move of cutting prices, which is obviously good news for buyers, sparked protests in some places.

During the National Day holiday, some buyers of properties in a development in Shangrao, in Jiangxi province, put up protest posters and even smashed up the housing sales office in the name of "safeguarding their rights". They were angry because similar properties to the ones they bought were now selling at a lower price. Similar incidents have occurred in other cities such as Hefei, in Anhui province and Zhangzhou in Fujian province, and even Shanghai.

It is ironic that homebuyers, who once complained that prices were too high to afford, are now trying to thwart real estate developers cutting their prices.

Cutting prices to promote sales is a normal business decision, especially given the huge pressure of real estate destocking and capital shortage when economy faces downturn pressure. Strict and ever-increasing government real estate price control policies are also prompting real estate developers to adjust their business strategy.

On Oct 8, an executive meeting of the State Council, China's cabinet, decided that cities and counties where house prices are soaring or that have a housing stock shortage should cancel the policy of providing monetary compensation for the renovation of areas with dilapidated house. This policy has been interpreted by the market as a move to curb housing price hikes, because the withdrawal of monetary compensation for such renovation projects will reduce the number of potential housing buyers.

As the Chinese saying goes, "The duck knows first when the river becomes warm in spring", and real estate developers have been the first to respond to the change in the market.

The price adjustments by real estate developers actually follow market rules, and have been welcomed by the government and people in general. "Housing is to live in, not for speculation" has been the government's slogan in recent years, and the government is making great efforts to cool down the overheated real estate market in order to meet people's living demand.

The unruly actions of some homebuyers in the name of safeguarding their interests has been widely criticized. Such behavior should not be supported. Promoting such illegal behavior not only encourages people to disturb the social order, it also promotes the impression that housing prices will never fall, which will encourage more real estate speculation.

The author is a writer with China Daily.
wangyiqing@chinadaily.com.cn