Chinese real estate developers are getting creative these days. After years of continuous growth, the real estate market in China has started to show signs of slowing down, so developers are looking for a way to jump start the sales. According to Business Times, Chinese property developers are offering free luxury cars and hefty discounts to lure buyers as lending curbs and funding constraints squeeze their finances.
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China Merchants Shekou Industrial Zone Holdings Co is giving away a BMW 3 Series or an X1 SUV to buyers of a three-bedroom unit or townhouse at its Shanghai development. The car, or cash equivalent, equates to about a 10 per cent discount on the 3.1 million yuan ($452,000) price of the 89-square-metre apartment (957 sq-ft).
At China Evergrande Group’s 646 nationwide projects, a basic 11 per cent price cut widens to as much as 26 per cent once extra perks, such as discounts to buyers referred by Evergrande employees or previous buyers, are thrown in. A further incentive: The developer is accepting an initial down-payment of just 5 per cent, compared with the usual 30 percent deposit required by local governments.
Apparently the practice is quite common these days in China, so packages like paid vacations are often seen as well.
The world’s largest automobile market is also quite hot these days for housing, but that could be slowing down. To stem the tide, a Chinese developer in Shanghai is actually looking to combine the two genres by offering a free BMW to anyone who buys an apartment or townhome in the company’s swanky building. That sounds like a sweet deal to sign on the dotted line, until you learn the units are approximately $621,000 each.
It’s not only the real estate market that is slowing down, the car segment is also showing signs of a pullback, yet it’s still the largest car market in the world. There were 28.8 million vehicles sold in China in 2017, only a 3 percent growth from 2016.