Zou Tao, a resident of the city of Shenzhen in Southern China, may not have known what he was stepping into when he first called on Chinese citizens to stop buying real estate. The 32-year-old golf equipment dealer first published an open letter on his internet blog in April telling Shenzhen residents to boycott the local property market. Since then the response has been enormous.
Zou told Western media he has received more than 150,000 pledges of support nationwide from Chinese citizens who are furious over steadily increasing housing prices and a market which is focused on high-end construction. The Wall Street Journal reports that the average cost of a new apartment in Shenzhen has shot up to about $125,000, which translates to about 10 years' salary for a local college-educated professional. Many fear that the cities are being overbuilt. Vacancy estimates for new residential buildings in Shanghai run as high as 25 percent, but at the same time official figures show 250,000 apartments come on the market in that city each year. With both cost and supply rising rapidly, there are now fears that a housing bubble in China's major cities could cause a price collapse, and with investment in real estate being 10 percent of China's GDP, this could batter China's economy.
Zou's message to fight the trend, “Don't buy a house for three years,” has landed him in so much trouble with authorities that his business and his blog have been shut down, and his future is uncertain. But the campaign has forced the government to take tougher measures to curb the overheating real estate sector. In June nine government ministries announced measures to tighten land supply and bank lending for construction of luxury housing and give incentives to the construction of low-cost housing.