Unable to sell luxury homes in Beijing, mainland developer Tahoe Group offers discounts of up to US$1.3 million
- Analysts say rich buyers have tightened their purse strings as the US-China trade war has a hit a range of businesses
As the ongoing US-China trade war weakens appetite of deep-pocketed mainland buyers for luxury homes, some developers have been offering massive discounts of up to 9 million yuan (US$1.3 million) to make sales.
Just a few days after Lunar New Year, mainland developer Tahoe Group began offering aggressive discounts for four luxury projects in Beijing, property agents said. A 410 square metre four-storey home at Cathay Courtyard in the south of the Chinese capital was being offered at 24 million yuan, 9 million less that the price of a unit in the same project sold last year. Meanwhile flats at the company’s The Noble Mansion in Chaoyang district, was being offered at a discount of nearly 30 per cent.
A range of Chinese businesses, manufacturing in particular, have suffered because of the prolonged China-US trade war. Punitive tariffs of 10 per cent slapped by Washington on US$200 billion of Chinese goods has made them uncompetitive while other industries have been affected by the souring market sentiment.
“People buying such homes are usually those who run businesses,” said Fion He, director of the research centre at Midland Realty, adding that they are quite sensitive to changes in the economic environment.
“Luxury homes are more difficult to sell than mass-market homes in a downward market.”
According to the latest data from JLL, the average price of high-end luxury homes in China fell 2.3 per cent quarter on quarter in the third quarter of 2018.