Sales flat despite big discounts
Labour Day felt more like Christmas Day as mainland developers slashed prices to lure homebuyers during the three-day holiday break, which ended yesterday. However, sales did not jump significantly, according to property agents.
In Guangzhou, a small number of developers, including companies from Hong Kong, offered discounts of 20 to 30 per cent during the holiday to attract buyers, the general manager at Centaline Property Agency's Guangzhou office, Huang Tao, said.
Demand had surged for these projects, boosting transactions by 30 to 40 per cent in the province over the last few days, compared to recent weeks, he said. Sales had climbed back to where they were more than a year ago.
One example of the discounting was new flats at Star River near Panyu, which were cut from 26,000 yuan (HK$31,971) per square metre to 22,000 yuan, he said.
About half the provinces' developers cut prices, with almost 90 per cent offering 5 to 10 per cent discounts and the rest slashing prices by 20 to 30 per cent. Flats with low or no discounts were harder to sell.
'Government restrictions on home purchases are still in place; many people are still deterred from entering the market,' Huang said.
Discounts were mainly offered on flats priced below 15,000 yuan per square metre, showing developers want to woo end-users or first-time homebuyers, agents said. However, the discounts did not boost property sales in Beijing and Shanghai.
'The restrictions on buying second homes continued to have an effect. There are first-time buyers in the market,' said Merrick Ngok, sales director of Shanghai residential at Centaline.
'But even though most of the developers in Shanghai have offered a 20 per cent discount, we only saw that visitors for the home sales exhibition had risen. Property sales did not improve significantly.'
In Beijing, developers were in a rush to launch their projects during the holiday.
Zhang Lei, research manager at Midland Realty in Beijing, said seven or eight new residential projects were launched on Thursday and Friday ahead of the three-day break. 'It is the most so far this year,' he said.
He estimated most of the new projects had offered a discount of 5 to 10 per cent.
'We didn't see any eye-catching discounts or festival sweeteners from the developers,' Zhang said.
According to the firm, about 250 new flats were sold on Sunday, similar to weekday sales.
Clement Luk, chief executive at Centaline in east and northeast China, said property sales had not increased significantly because it was only a three-day holiday.
'Also, the central government did not relax its measures to cool the property market,' he said.
'The banks relaxed mortgages for first-time buyers only. It could only attract end-users under current market conditions.'