China Evergrande slashes prices of new flats by a quarter as coronavirus leaves developers struggling with plunging house sales
- China Evergrande says it will offer a 25 per cent discount until the end of February, narrowing to 22 per cent in March, at all 811 of its projects
- Developers are grappling with a cash-flow crisis and mounting debts as the viral outbreak threatens to derail China’s vital property market
One of China’s largest developers will slash the prices of all its new flats by a quarter in what it says is the biggest ever nationwide price cut, as the coronavirus outbreak threatens to derail China’s all-important housing market.
China Evergrande, the country’s third biggest builder by value, said it will kick off a one-and-a-half-month campaign offering discounts of up to 25 per cent at all of its projects across the country.
The company, chaired by China’s third-richest person, Xu Jiayin, said in a statement that “to cope with the changes of the new period, Evergrande will offer special big discounts at all of our projects, starting from February 18.”
All flats will be offered at a 25 per cent discount until the end of February, narrowing to 22 per cent in March. The scale, and the size of the discounts, makes this a much bigger campaign than one Evergrande carried out last year.
The company currently has 811 projects on sale, according to its latest annual report.
The move is seen as an attempt to raise cash and ease the finance crunch faced by Evergrande and its peers as home sales plunge amid the novel coronavirus, which broke out in China in January.
“No single developer would like to cut prices, considering that their profit is already very thin. But they have no choice when they cannot sell their flats,” said Gan Li, a professor at Southwestern University of Finance and Economics.