Chinese villagers jumped at the deal of a lifetime—then it turned sour
It seemed to be a great deal at the time: Swap an aging townhouse and a small piece of farmland for five apartments and two stores. Bella Zhao’s family grabbed that offer in 2009, when property developers led by Wanda Group moved into their sparse, snow-capped village in China’s northeastern Jilin province. Wanda planned to spend $2.8 billion to turn the area into a high-end resort replete with ski slopes, golf courses, hunting spots and five-star hotels.
The developer offered locals a large number of new apartments in town in exchange for their old homes, creating a village of property tycoons almost overnight. “I was so happy then," said Zhao, who was a teenager at the time and later inherited the properties. Now, all five of her apartments sit empty.
Only one of the stores has a tenant. The ambitious development project stalled years ago; the promised tourism boom never happened. Zhao has become so desperate that she has offered to lease the apartments rent-free so long as the tenants agree to pay the bills and management fees.
“But no one wants to live there, even for free," she said. “Everyone who still lives in the town has their own properties." While much attention has focused on Chinese property developers in the wake of the country’s real estate crash, homeowners, too, are stuck. Many are desperate to sell with no buyers in sight.
Others, like Zhao, thought they had a winning lottery ticket, only to find it is now impossible to cash it in. Their plight feeds into the uncertainty weighing on China’s economy. It holds back attempts to get consumers to spend more, which would lead to higher demand, leaving the government to once again focus on industrial policy and increased supply.
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