Home buyer Pan Hua stood outside in the cold, holding a real estate flier, but it did not appear to be the chilly weather that was making her hands shake.

The words printed on the flier — “6,000 yuan less” — spelled good news to many. But to an angry Pan, it was confirmation of a big financial loss.

Pan and her husband bought an apartment from Champs-Elysees real estate in north Hangzhou a day before the advertised price reduction. They paid 19,000-plus yuan (US$3,091) per square meter for their 88 square meter apartment.

“Overnight, I lost tens of thousands of RMB. Where does the developer’s heart lay?” Pan wrote in article posted on the Internet.

Pan is not alone — there are hundreds of unhappy clients of three north Hangzhou real estate firms that have dropped their prices. The spark that led to the drop appears to be a new high-voltage power line in the area that the buyers say would affect their health.

While at least one prominent real estate analytics company has said that the price drops in one area aren’t by themselves indicative of a broader trend in Hangzhou, it also noted that the prices in those projects were vulnerable to a decrease.

And some of the real estate company officials have called the price decreases a sales tactic that they said it was linked to the market. They said the cuts boosted sales, despite the power line complaints.

The controversy has created a chicken-and-egg conundrum about the relationship between the power line objections and the price cuts.

There is little doubt, however, that angry protests that have broken out among buyers illustrate the vulnerability of real estate prices, which have in recent years risen almost non-stop.

Homes as investment vehicles

Hangzhou housing prices are among the highest in second-tier cities in China’s mainland. Last year, 43,386 apartments were sold in the city’s urban area at an average price of 22,091 yuan per square meter, not too far below Shanghai’s average of 24,177 yuan.

But many cities, including Hangzhou, have started to see some softening of price increases with an abundant supply in some cases and the implementation of government policies to prevent the type of housing bubble that could bring wider losses.

For many Chinese whose homes are their primary investment vehicle for safeguarding and growing their hard-earned money, downward pressure on property prices can be upsetting.

The protests at the Hangzhou real estate companies have ranged from dozens to hundreds of people, and in the case of Champs-Elysees real estate, there was a sit-in every day last week at the sales office. Buyers held banners and wore T-shirts that said, “Return my money” and “The developer cheats.”

“The salary of construction workers remains the same, the price of cement and steel has not dropped, why does the house price drop?” asked an owner who identified herself only as Ye. “I bet the quality of the house is unsatisfactory!”

The protesters toppled models of the project in the showroom. One house owner was detained after getting in a fistfight and was freed the next day.

The buyers say they are worried that the electromagnetic radiation generated by the high voltage power lines could harm them. Studies conducted around the world on links between EMF and cancer, however, have been inconclusive and the power lines are 100 meters from the homes, while the national standard is at least 10 meters of separation.

The situation is aggravated by a dispute between the agencies and buyers as to whether the buyers were notified about the lines, with the agencies saying they provided notification and the buyers saying they knew nothing until the pylons started going up.

Last weekend, when the office for Light of City real estate of Vanke Group in Yuhang District in north Hangzhou announced it would cut its average price from 16,000 yuan per square meter to 15,000 yuan for its remaining inventory, protesters gathered under a banner that read: “No More Trust in Vanke. Return! Return! Return our Money!”

They also protested the above-ground 220-kilovolt high-tension cables at the back of the residential area.

At North Sea Park real estate 500 meters from Champs-Elysees, a price reduction (from 18,000 yuan to 15,800 yuan per square meter) has allowed the company to sell out 95 percent of its inventory in one week. The DoThink Group that runs North Sea called the price reduction a flexible sales policy.

“This price cut cannot be taken as a wind gauge for Hangzhou housing price reductions,” said Qian Minjie, an analyst at Living in Hangzhou, a leading website of Hangzhou real estate analysis.

But Qian said the Xiangfu block, the location of both the Champs-Elysees and North Sea Park developments, “there are abundant new developments and few second-hand houses and therefore there is a potential to cut prices.”

And Light of City, close to the Xiangfu block but in Yuhang District, “had high prices previously and it was possible to reduce the price,” Qian said. Light of City’s average price in its last release for sales was about 16,000 yuan per square meter, while the average for Yuhang District last year was 11,245 yuan.

The “6,000 yuan less” advertisement by Champs-Elysees was, in fact, a marketing ploy — only one apartment had price that cheap. In the new round of sales release last Friday, the average price drop was about 3,000 yuan, about 15 percent lower than the last round.

Wu Jianjun, vice president of Guang Hong Real Estate Development Company that runs Champs-Elysees, told Shanghai Daily that prices were cut because of “market pressure” as a “sales method.”

Developers of the North Sea Park agreed. Yet, homeowners insist the North Sea Park price reductions were linked to the construction of a transformer substation 30 meters northwest of the residential area.

They say they were not aware that there would be a substation until June, when government publicized it on website. Plans to build a substation were set by the government many years ago.

“After the government’s announcement, the company’s sales were poor, but the price reduction helped it sell out the rest of the apartments,” said Wang Ziwen, a house owner.

But even though the substation is 30 meters from one building of the North Sea Park, its electric lines are underground and are not considered harmful.

Experts said getting any more changes made will be difficult. “Developers do not have right to remove electricity lines, so owners should be talking to the government,” Qian said.

“The cables and station are planned by the government and all meet national standards, meaning there is no problem,” according to Dai Heping, a Hangzhou real estate lawyer.