Nationwide ocean-view real-estate scam hits Chengdu
"Let's go see the sea together!" For residents in landlocked Sichuan, the temptation of an apartment overlooking the ocean at an unbelievable price is too great to pass up. But these advertisements fail to deliver on their promise of "cheap and convenient flats overlooking the sea."
From West China City Daily:
When a Chengdu citizen surnamed Zhang returned to his car after shopping at the Wangujing department store last Wednesday, he found a flier for Ocean View Apartments attached to his windshield. The flier advertised an attractive deal to potential homebuyers: Furnished flats in popular Weihai, Shandong, resort destination Silver Beach for just RMB4,000 per sqm. On top of that, the property owners would arrange roundtrip flights to Weihai for potential buyers to preview the apartments.
Zhang noticed that Ocean View Apartments already had two sales centers in Chengdu, one in Fortune City and the other in the Sun Dynasty International, so he called the hotline on the flier. The representative told him that he could join a flat-viewing group and if he purchased, he would be reimbursed RMB 1,800 for his flight and hotel expenses.
One of many videos advertising the Ocean View Apartments on popular video sites.
It sounded too good to be true. So Zhang called the local West China City Daily newspaper to find out if it really was.
On August 15, undercover reporters from West China City Daily visited the Ocean View Apartments Chengdu sales center in Fortune City and declared the deal suspect.
At the reception center, the representative "regretfully" informed the reporters that the Victoria Garden (维多利亚花园) units, which cost RMB4,000 per sqm on average, were sold out. The only units still available were those in four high-rises that had better sea views—and cost RMB 5,000 to 6,000 per sqm.
Otherwise, there was the Aegean Ocean View (爱琴海景小区)—"a newly built and delicately furnished block" costing about RMB 4,000 per sqm. "The only disadvantage of this block," explained the representative, "is that you can't see the ocean from here."
To Chengdu residents, these prices sound like a score. But the reporters ran a preliminary check online and quickly learned that most Ocean View Apartments in Silver Beach cost less than the quotes given by the representative. On a number of real-estate web sites, Ocean View Apartments are listed from RMB3500 per sqm to as low as RMB2,352 per sqm .
"Any block you like," said a third-party agent who sells Ocean View Apartments. "We have plenty of new flats costing 15 to 20 percent less than property developers' prices. Almost all of them are available now."
The property developers' sales representative paints a completely different picture, however. She said that not even a month after the Chengdu sales center had been set up, 27 apartments had been sold, and all tour-group flights are fully booked through this week.
This scam has been going on for quite some time now—and in many cities across the country.
Last November, when Ocean View Apartments was running a heavy promotion campaign in Beijing, a group of undercover reporters from CCTV2's "Half-Hour Economy" (经济半小时) toured the flats. The reporters and other apartment viewers spent over 15 hours being driven to the flats (the representative promised that the 700-kilometer shuttle ride from Beijing to the apartments would take six or seven hours) and only three hours viewing the apartments. The flats were minimally furnished instead of "fully and delicately decorated," and the much-touted sea view was, according to staff, "hidden behind the fog."
The reporters and other potential buyers were "closely watched" by the staff and not allowed to walk around on their own. After just 30 minutes of viewing the flats they were pressured to make a non-refundable down payment of a few thousand yuan if they were considering buying a flat. Worse, when a friend of the reporters came to pick them up in his car, a Silver Beach employee threatened him with violence until the reporters handed over RMB300.
Despite the CCTV exposé, the advertisements are still continuing. The City of Rushan, whose jurisdiction Silver Beach falls under, says it is changing applicable regulations in order to rectify the situation.
Zhao, a Weihai native who now works in Chengdu, told reporters that Silver Beach is in a remote suburban area with limited amenities and infrastructure—not at all the bustling central area that the developers have made it out to be. Furthermore, driving from Qingdao to Silver Beach takes at least three hours.
Shanghai resident Wang traveled to Silver Beach from Shanghai earlier this year. "There were no supermarkets or hospitals. I couldn't even find a restaurant at dinner time," she said. "I stopped all my friends from going there."
Because of the inconvenience of living there, many Ocean View owners rent out their flats. The high supply has driven down the rental price to rock-bottom rates. This furnished, 70-sqm Ocean View Apartments unit, for instance, is listed at a mere RMB400 per month.