China’s debt-laden developers offer discounts and giveaways to sell more flats to boost cash flow

China’s property developers are aggressively ramping up marketing efforts to sell more flats to boost cash flow as buyers in the biggest mainland cities are in no hurry to make purchases in the current market slump.

Developers in first-tier Chinese cities have adopted numerous marketing tactics to capitalise on the holiday period, from the Mid-Autumn Festival this week to the upcoming National Day holiday on October 1, a traditional peak season for property sales. Tactics range from offering coupons for discounts amounting to as much as hundreds and thousands of yuan, referral schemes where a buyer gets a discount for introducing another buyer, and slashing prices to undercut the market.

“The market outlook has changed. Buyers are no longer in a hurry to buy, which makes developers willing to compromise on prices [in Shanghai] in exchange for volume, and thus ensure faster cash recovery,” said Lu Wenxi, a senior analyst with Centaline Shanghai.

China’s debt-laden developers are anxious to offload their stock as proceeds from pre-sale flats have become a major source of funds after Beijing put a curb on lending to contain soaring property prices.

Take China Evergrande Group, the country’s third-largest developer by sales, which has adopted multiple tactics to boost sales between August 30 and October 10.