Shanghai municipal government has urged home buyers and property developers to resolve their disputes on home prices through talks or judicial process.
Now, as the city’s home prices have shown clear signs of weakness, thanks to Beijing’s stringent measures to prevent property bubbles from harming the broader economy, home owners on mortgage are complaining about “being forced into underwater”, staging protests which sometimes escalates to violence.
At some real estate projects, home buyers got together, speaking on horns or putting up banners demanding developers give them subsidies for their home losses, or agree to take back sold homes and recoup all their funds.
According to The Shanghai Daily, hundreds of angry homeowners flocked to sales offices at three residential projects -- one in Pudong New Area and two in Jiading District - over the past weekend, seeking refunds or contract cancellations, after learning that developers had slashed prices by 20 to 30 percent as they combat ever-tightening capital flow.
A woman surnamed Kong who bought a house before the discount was given was among those irritated.
"My house is to be delivered in March and I haven't even gotten the key yet. But its price has dropped by that much," Kong told the Xinhua news agency.
Similar episodes have been reported in the cities of Beijing and Hangzhou, where housing developers, pressed by a financial crunch and a sales slump, have moved to cut prices to prop up sales.
While home price is settled in contracts and is often a reflection of the supply and demand in a market, developers must obey strictly the "one home, one price" rule and remain subject to public supervision, Xu Wei, Shanghai government spokesman, told a press conference yesterday. The rule requires transparency on the part of developers, so that prices are open for everyone to see.
On Wednesday, homebuyers again besieged a developer's sales office in Jiading, demanding a total refund of their money.
Representatives of Greenland Group and China Overseas Property (Group) Co, two of the three developers involved in the price disputes, said homebuyers should go to court if they continue to demand contract cancellations.
The city government said yesterday that it has intervened in an effort to help developers and homeowners reach a peaceful solution based on laws.
