Country Garden shares slump to 14-month low after angry homebuyers storm sales centre to protest price cuts
A decision by the developer to cut prices by up to 30 per cent sparked a wave of anger among buyers who had paid full price
Shares of Country Garden, mainland China’s largest developer by sales, slumped to a 14 month low on Monday, after video circulated on social media showing protesters mobbing at least one sales centre during the weeklong national holiday. They ended 6.7 per cent lower to close at HK$9.05 in Hong Kong, their lowest level since August 21, 2017.
Scores of protesters, some seen holding Chinese-language placards that read “return my hard-earned money”, others throwing rocks, mobbed a sales office for Xinzhou Mansion, a Country Garden residential project in Shangrao, Jiangxi. A decision by the developer to cut prices by up to 30 per cent sparked a wave of anger among buyers who’d paid full price.
A similar incident took place in Shanghai, where Country Garden slashed prices at its residential project One Mansion by as much as 25 per cent.
During the “golden week” national holiday, which kicks off on October 1, it is not uncommon for developers to roll out various incentives to lure buyers. These include discount coupons worth as much as hundred of thousands of yuan off that can be used to offset the price of a new home purchase, as well as referral schemes and outright price cuts.
Developers large and small are feeling downbeat amid signs the real estate market is starting to soften after a long period of growth.
The sell-through rate – comparing the units sold and the total units available in a new property project, indicating its popularity – declined in 11 cities in August and 16 cities in September, according to statistics from consultancy China Real Estate Information Corp (CRIC).