China property

Prayers, lucky charms help Shenzhen home lottery entrants win a chance to buy dream flat

The treasure hunt among buyers is a result of the government’s stringent property curbs, including direct price controls

PUBLISHED : Wednesday, 30 May, 2018, 7:32am
UPDATED : Thursday, 31 May, 2018, 12:11pm

A property buying fever has gripped Shenzhen, as all new flats launched through the city’s first public lottery scheme were snapped up within four hours of going on sale on Wednesday.

The lucky few, who managed to get their hands on the 167 units at Shenzhen China Merchants Real Estate’s luxury residential project, Shuangxi Garden Phase Three, were ecstatic.

“I am so lucky to be the first one to pick up a flat that I like before all others,” said Wu, who only gave his surname, who chose a 205 square metre flat that cost about 17 million yuan (US$2.64 million).

Home hunters in major Chinese cities forced to head further afield

“I had this winning feeling,” said Tina Li, who gave a high-five to her husband and hugged her mother. “We really like the neighbourhood as we have been checking flats in the area for more than half a year. I am so happy that I could get one that meets all my requirements and at such a cheap price.”

Li said she would be paying just over 30 million yuan after discount for her 280 sq m flat, which was well within her budget.

The smallest flat on offer in the project in Shekou, where Shenzhen’s pilot free-trade zone will be located, is 204.65 square metres, while the largest is 425.28 sq m. The prices range from 16.73 million yuan to 65.59 million yuan.

Prospective buyers braved the hot weather, with some bringing their parents and small children in strollers to the sales centre at the Hilton hotel in Shekou close to the residential project.

Long lines had formed in the lobby an hour and a half before the sales had been launched.

Some said that they had prayed at the temple and some had brought their lucky coin to the lottery, all in the hope of winning a chance to buy their dream house.

Huang, who did not give her first name, brought along her 80-year-old father, hoping to get two units on the same floor.

“We would like to buy two on the same floor so that my father and I can live close by. But that depends on the number we have got. Wish me good luck,” she said.

These lucky few buyers were drawn from a pool of nearly 881 applicants who had deposited 5 million yuan just to get a chance to buy the flats.

“The enthusiastic response received for this project is indicative of the strong buying demand in the market for new property launches,” said Yan Yuejin, director of E-house China R&D Institute, a market intelligence firm. “It is simple. People are flooding to buy new flats as prices of the new ones are cheaper than the pre-owned ones due to the price cap.”

Shenzhen, the Chinese city with the largest population growth, saw its new home prices in April dip 0.03 per cent to 54,169 yuan per sq m from March, reflecting the 19 straight month of decline, a result of the government’s stringent property curbs, including direct price controls.

According to local agents, currently there are about 30 units in Shuangxi Garden’s Phase One and Phase Two on sale and the average price is about 140,000 yuan per sq m to 150,000 yuan per sq m.

Twenty-one units are listed at prices below 100,000 yuan per sq m and one is listed for sale as low as 81,728 yuan per sq m. Agents expect that after discounts, the average price flats in the project could fetch was around 120,000 yuan per sq m.

“We often see long lines outside new project launches that sell out within hours in cities like Shenzhen recently,” said Yan. “We might see more cities and developers adopting lottery system as the demand is still quite strong.”

Wednesday’s sale was the first through a public lottery scheme that was monitored by a local government notary in Shenzhen.

Seven mainland cities have clear policies on the lottery scheme, including Shanghai and Chengdu, which require all new projects to be sold under the system. Five other cities, including Hangzhou, Nanjing, Wuhan, Changsha and Xian, urge developers to adopt the lottery scheme if their residential projects are oversubscribed. Shenzhen has yet to introduce a formal policy on the lottery system.