My Take | China’s real-estate market enters a new phase as cities end bitter war against property speculators
- China’s war against perceived property speculators started nearly two decades ago, when housing prices in the country began to take off
- But with the problem having shifted from ‘too many buyers’ to ‘too few buyers’, the nation now has to reckon with its outdated system
It is a remarkable U-turn that has caught on in major Chinese cities. While a number of places, including Beijing and Shanghai, still maintain restrictive measures to keep unwanted buyers out of the local housing market, the days are numbered for such measures given the slump in China’s property market. In fact, even in Beijing and Shanghai, small steps of relaxation have already started.
China’s war against perceived property speculators started nearly two decades ago, when housing prices in the country began to take off. As public complaints about unaffordable housing grew, authorities blamed exorbitant housing prices on “speculators” who were flipping property for quick profits.
That was the time when the term “Wenzhou housing-speculation legion” was coined. People from Wenzhou, a port city in eastern Zhejiang province, who speak the same dialect and are believed to be rich, had formed “legions” to speculate in property markets across China, according to many news reports at the time.
While the actual size and power of this mysterious property investor group were never proved, it has offered an ideal scapegoat for runaway housing prices. The supposed existence of greedy speculators, in turn, provided a rationale for authorities to establish a property “control and adjustment” policy system.
