Dubbed the "Jews of the Orient" (东方的犹太人), the Wenzhou people from southeast China have been stereotyped by other Chinese as real estate speculators. A Chinese publication reports that Wenzhounese speculators played a disproportionately large role in the property bubble in China, and probably in other parts of the world. One estimate attributes half of the buyers in the Hainan Island to Wenzhounese speculators who usually buy in groups with money pooled together. "It was kind of like a hit and run thing where they swooped on Hainan island causing prices to escalate and then fled at the top of the housing bubble," said an observer.

Mythical Reputation

Another publication writes glowingly of them: "Wherever they went, there would be skyrocketing prices of real estate. Wenzhou folks are arguably the world’s most successful housing speculators, for three main reasons. First, they are intimately familiar about the characteristics of China’s housing market, i.e., that the government itself is the biggest developer in the biggest housing market on the planet. This leads, therefore, to the second reason, i.e., they know that housing prices will continue to rise as long as the government operates in the land and housing development business for its own interest. The third, and not the least, of the three reasons is that Wenzhou folks can mobilize money extremely efficiently from an increasingly sophisticated informal, i.e. "underground," i.e. illegal, banking system."

Their invincibility as property speculators took a dive however in the wake of the Dubai crisis. Many of them got badly burnt with losses estimated at 2 billion yuan. Following more government restrictions on the property market in China, they apparently decided to take a break from property and switched to gold instead.

Coming to Malaysia?

Rumours of them intending to come to Malaysia surfaced some months ago. We asked property consultant Gavin Tee, one of the speakers at the recent House Buyers’ Association (HBA)’s seminars on how credible the rumour is. His response:

"Wenzhou people invest in anything. There was speculation that they went to Singapore to buy properties. So, I checked with some Malaysian friends who deal with Chinese businessmen. I also checked with the folks at the ministry. So far, I haven’t found any such evidence."

We believe that they have yet to come to Malaysia in droves. If they had, Malaysia would be in the thick of a property bubble now. As it is, the Malaysian property market still suffers from a "laggard" reputation in comparison with its neighbours, particularly Hong Kong and Singapore.

As to whether they would be coming, who knows?