Everything Must Go!
Chinese residential real estate developers are turning to creative (desperate?) cross-promotional sales tactics in an attempt to clear their growing housing inventory.
In the latest sign of Chinese developers’ desperation to unload inventory into a weak property market, China Vanke Co is offering discounts of up to $325,000 to homebuyers who shop on Alibaba’s Taobao, an e-commerce platform. The country’s biggest developer will give discounts that match shoppers’ spending of up to Rmb2m ($325,000) on the eBay-like service. Homes in real estate developments in Beijing, Shanghai, Guangzhou and Chongqing, among other cities, will qualify, according to an advertisement on Taobao’s website.
Developers began cutting prices this year but have so far failed to revive flagging volumes. More than 30 cities have also removed purchase restrictions introduced in 2010 to restrain price growth amid public anger over high prices. Residential property sales fell 9.4 per cent in floorspace terms in the first seven months of the year compared with the same period in 2013, according to government statistics.
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An office tower in Henan province offered car washes by bikini-clad models to people who referred a friend to the building’s account on WeChat, the instant messaging service run by Tencent Holdings. A residential developer in Wuhuan offered new iPhone 6s to potential buyers who showed up at the sales office.
While few would-be homebuyers could afford to spend millions of renminbi on Taobao in a single year, Vanke is offering a more modest discount of Rmb50,000 to those who have spent smaller sums on Taobao over the past year. “Putting full effort into destocking has become the common choice of most developers. They’re still not optimistic about the market situation,” the China Real Estate Index System, a private data provider, said in a commentary last week.