BEIJING — Ten days before the summer Olympics, Zhang Yong took the plunge and bought his first home.

Engaged to be married later this year, Zhang, a 29-year-old sales manager in Beijing, chose a three-bedroom apartment in an up-and-coming eastern suburb of the capital. His neighbors would be educated and middle-class. The neatly planned compound of high rises — still under construction — would include a pre-school, a gym and all the other trappings of modern suburban life.

The $180,000 apartment seemed a great investment and the perfect way to start off married life. Zhang jumped at the chance.

“I saw it in the morning and bought it in the afternoon,” Zhang says, sipping a cappuccino in a rooftop coffee shop at his downtown office building. “I thought the prices would go up even higher after the Olympics because prices were always going up, never down,” he said. “I didn’t know this would happen.”

Only a month after making a 25 percent down payment, Zhang’s dream home became a burden. Indeed, more Chinese are getting a taste of what American homeowners have been suffering for much of the past year.

Still months away from completion, Zhang's apartment-to-be lost a quarter of its value as Beijing’s housing bubble burst in dramatic fashion. As the walls and the wiring took shape, appliances and furniture were moved in, its value continued to decline. Eight months after he bought his home, apartments in the same complex are selling for 40 percent less per square meter than Zhang paid.

Zhang and dozens of others who bought in the compound before the pre-Olympics property bubble popped have tried fruitlessly for months to get some concessions from the developer. They asked for furnishings, fixtures or cash to make up for the value that disappeared from their as-yet unlived in apartments. Most simply gave up and are hoping property values will rise in years to come, after they finally move in this spring.

“We just accepted our bad luck,” said Zhang. “Now we hope we can simply have a comfortable life there.”

With a dramatic rise in China’s property market in recent years, there was plenty of room for a major fall. As the economic boom unfolded over 10 years to varying degrees across China’s cities, housing prices rose dramatically — with buyers routinely paying double or triple what they would have shelled out a decade ago.

But China’s property crash, which began in southern cities two years ago and accelerated quickly in recent months, is not like that of the United States. The same elements of hype and speculation, with the accompanying bad loans, do exist. The main culprit here, experts say, is vast oversupply and overpricing. There simply aren’t enough buyers who make enough money for all the middle- and upper-end properties built in recent years.

“The Chinese property market is still like a child; the American property market is like a middle-aged man,” said Yang Hongxu, a real-estate industry researcher in Shanghai. “Although they both need improvements, the Chinese market, of course, has a lot more defects that need to be repaired.”

In cities like Beijing, where seemingly the entire landscape was renovated for the Olympics, scores of empty and half-finished high rises tell a tale of property development gone wrong. In one section of Beijing, a whole housing complex intended for thousands of Korean expatriates sits unfinished, its fate doomed after Korean companies recalled employees in China amid the financial crisis.

What’s also apparent is a connection between the global crisis, decline in demand for Chinese goods and faltering housing prices. The urban centers of China’s manufacturing belt — Shenzhen and Guangzhou — have been hit hardest by the housing crash. Housing prices in March were down 18 percent in Shenzhen and 9.4 percent in Guangzhou from a year earlier. Nationwide, the official numbers are lower but prices are expected to fall by 10-15 percent this year.

While the crash has left many a renter to rejoice, it’s created major heartburn for policymakers looking for solutions for a property market with too much high-end development and not enough affordable options. For those who were unlucky, like first-time homebuyer Zhang Yong, it’s been a lesson.

“So many things happened out of our control, there’s nothing we can do,” said Zhang. But should he buy again, he said, he’ll spend a lot more time doing research and a lot less time listening to developers and realtors.

Other recent GlobalPost dispatches on China's economy:

Throwing BRICs

Does China think the US is too big to fail?

Bad economy, better lungs?

For more on the global economic crisis:Click here for the full report

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