Qingdao flat prices cut by 5 per cent as city heeds warning of China’s top decision-making body

Agents say builders will have to offer steeper discounts as buyers wait on the sidelines to woo buyers in a tightening market

Data from Qingdao’s real estate registry shows sales in July fell 12 per cent compared to the previous month

Reading Time:2 minutes

A worker walks towards residential buildings under construction in Qingdao, China, on May 8, 2018. Upgraded property curbs have hit sales in the northern mainland city. Photo: Bloomberg

Published: 7:30am, 7 Aug 2019Updated: 8:05am, 7 Aug 2019

Qingdao is the first city to offer new flats at a discount after China’s top decision-making body warned against using property as a tool to stimulate the economy.

A developer in the coastal city of Shandong province was offering a new batch of flats at Wenlan Mansion at 10,000 yuan (US$1,441) per square metre – 5 per cent lower than the previous lot – just days after the Communist Party’s Politburo underscored a hawkish stance on cooling the housing market.

That means those who bought homes in the same project only a month ago for 10,500 yuan per square metre would see their wealth evaporate by at least 45,000 yuan on homes that range from 89 to 125 square metres.

“Even with such discounts, potential customers who used to actively approach us earlier are losing interest,” said Li Chun. “Developers have to offer steeper discounts otherwise we will see an even tougher market ahead.”

Last month only 12,966 new homes were sold across Qingdao, 12 per cent fewer than June, according to data from the city’s property registry.

The northern Chinese city is among second-tier cities, including Hangzhou and Nanjing, where developers are starting to cut prices to woo buyers amid falling sales because of upgraded property buying curbs.