Developers woo holiday crowds at Guangzhou property projects as home prices rise 10 per cent in six months
At 5am on China's National Day, potential buyers started lining up outside the selling centre at Stone Village, a Fok Ying Tung Group property development in Nansha, about an hour's drive from downtown Guangzhou.
"It was so crowded that we had to divide people into several groups to see our three sample homes," said a local director of the project.
Close to Nansha Marina, a yacht clubhouse built by the group, the first phase of the project offered 140 garden houses ranging from 77 to 165 sq m, with prices averaging 18,000 yuan (HK$21,900) per sq metre.
Nansha, a new free-trade zone in Guangzhou officially launched in April, has seen average home prices rise more than 10 per cent in half a year, according to data from real estate portal Fang.com
Nansha was the only district in Guangzhou to see both its transaction volume and average selling price increase in September, despite consumer demand being depressed by the volatile China stock market and yuan depreciation.
By the end of National Day a third of Stone Village's 140 houses had been taken. And although the number of visitors dropped significantly the following day, sales agents said they pre-sold at least half of the houses on offer in two days.
The buyers, who mostly came from the Pearl River Delta region including Guangzhou and Shenzhen, along with a few from Hong Kong, are eyeing possible high returns given that the development is a coastal low-rise that differentiates itself from the usual urban high-rises.
"At this moment, I don't think it's possible for Nansha to be for everyday living except for spending holidays. It might get better in the next three to four years," said Anna Xu, a Guangzhou resident who accompanied her elderly mother to view the project.
October may be the last opportunity for mainland developers to sell new projects in order to meet their annual sales targets, after the traditional "golden September" turned sour. According to researchers from property agency Centaline, a new supply of approximately 5,000 homes from about 30 new developments were expected to reach the market for sale during the first week of October.
The first few days of "golden week" is not only the busy time for Chinese to view new developments as if they were visiting tourist attractions, but it is also the time when developers gear up with more marketing strategies and incentives to boost publicity and sales.
In Nansha, Fok Ying Tung invited pop singers to perform at another of its projects, Dong Yuan Residence, which is targeted at buyers looking for homes they intend to live in themselves.
At another popular site during the holidays, western Guangzhou - where villages are being transformed into modern urban centres - state-backed developer China Overseas and Land Investment (COLI) provided a 100,000 yuan discount off the price of a flat in return for a deposit of 20,000 yuan from potential buyers of its large-scale project One Blossom Cove, which has sold more than a third of its 600 residential units offered in the first batch since mid-September.
"It's too expensive for me. The average selling price has risen to over 30,000 yuan per square metre," said Cherie Li, a local office clerk who viewed COLI's sample rooms with her friends on October 2.
Large crowds at the selling centres do not necessarily mean people are buying. Preliminary data from Sohu's real estate portal shows that the average number of new Guangzhou home deals that were completed online from October 1 to 3 was less than that in the last week of September.
Some analysts said that was due to the restrictions in buying houses in the four first-tier cities, including Beijing, Shanghai, and Shenzhen, which did not benefit from the down payment cut for first home buyers announced by the People's Bank of China on September 30.
Some local property agents, however, still remain confident of better sales in October.
"Guangzhou's average housing price is the lowest among the four first-tier cities," said Zhang Zebin, a Guangzhou-based director with listed real estate consultancy Worldunion.