Wenzhou's once-hot housing market comes crashing down
Wenzhou, in Zhejiang, went on a speculative homebuying craze, many on borrowed cash, until market curbs caused prices to plummet
Stroll down the streets of Wenzhou and it doesn't take long to realise how dead its once red-hot property market has become. In property agencies, brokers take an afternoon nap or watch television in offices that once buzzed with activity.
"Home prices have plummeted by about 60 per cent since 2010. No one wants to buy flats when their prices are declining. Everyone is just watching the market now," he added as he flicked through a newspaper while waiting in hope for clients.
Wenzhou, the entrepreneurial hub in coastal Zhejiang province, is home to wealthy businessmen who are famous for buying - or speculating on - properties and are blamed for inflating mainland property prices.
The city's property market peaked in 2009 and 2010, when almost everyone, from manufacturers to taxi drivers, in Wenzhou was a home owner, if not a speculator. Some high-end homes were priced at as much as 70,000 yuan (HK$86,000 at current rates) per square metre (or around HK$8,085 per square foot), which is more than double the annual income of the average Wenzhou resident, according to agents.
"No one really focused on their own job and almost all were involved in speculative activities at that time," Wu Yuanzong, who has worked as a property agent in Wenzhou since 2008. About 80 per cent of his friends were making money through speculation before the city's property bubble burst about two years ago.
