No Money Down Comes to Beijing

A development in Yizhuang, in the Daxing district of southern Beijing (outside the 5th ring, SE) is using a zero money down promotion. The property can be viewed here: 珠江四季悦城. As an aside, on that page: Buyers cannot move in until October 31, 2015. Not only have developers been building a year or two ahead of demand, but they can also sell their properties a year or two before they are completed due to high demand. Developers with otherwise good properties who assume quick turnover can face bankruptcy. All it takes is a slowdown in turnover and a tight credit market, and they are bereft of cash. Additionally, if the building is not ready to be lived in yet, the developer cannot tap immediate housing demand. Chinese buyers increasingly have a "wait and see" attitude and they already do not expect to move into these properties for one or two years.

From the article: The developer in this case, Beijing Pearl River Investment Corp., is letting home buyers "Bid Farewell to the Down Payment." Financial assistance is provided by Soufun (SFUN). The property also sells at a discount to area homes: average prices are about 30,000 per sqm, but this property sells for 14,800 per sqm. According to a Soufun employee, many Beijing area (which includes parts of surrounding Hebei province) housing developments are offering deep price cuts. In Xianghe, a commuter city just outside of Beijing, one developer is doing a limited supply promotion sale of 50 sqm apartments for 150,000 yuan total, or 3,000 yuan per sqm.

The article closes by explaining that most developers want to hit 60% of their annual sales target in the first half of the year because sales are only strong again in September and October (around the time of the week-long National Day holiday.) This year, some developers will struggle to hit 50% if sales remain weak, so more promotions are coming.

零首付蔓延至北京等一线城市 去化成房企首要任务

No comments:

Post a Comment