2024-04-09 14:45:31
‘Unconventional marketing’ amid real estate recession
“Free sea view apartment in Shandong Province”
Chinese real estate developer faces liquidation again
In China, where the economic slowdown is severe due to the real estate market recession, ‘1+1’ marketing has emerged where you buy one house and get another house for free. This strategy, put forward by a real estate sales company in the capital city of Beijing, is to give free ocean view apartments in Yantai, Shandong Province, to consumers who purchase apartments in Beijing. Chinese authorities are abolishing various real estate-related regulations, but the market has not yet escaped winter, with large developers facing additional liquidation crises.
According to the Fengpai Newspaper and Securities Times on the 7th, a real estate company in Beijing’s Tongzhou district held a ‘Buy 1 Get 1 House’ event during the Qing Ming Holidays (4th to 6th). During this period, if you purchase a new two-bedroom 77㎡ home in Tongzhou District, you will receive a 108㎡ home in Yantai for free. If you complete your contract within this month, you can also participate in a sweepstakes that will give you a 7-night, 8-day cruise.
The price of the apartment in Tongzhou District is about 4.4 million yuan (about 820 million won). To receive the 1+1 benefit, you must pay the full amount within this month. There is an analysis that real estate companies, which are under financial cost pressure amid continued sluggish sales, have launched unconventional products to save urgent money.
The authorities also began reviving the real estate market by easing regulations. On the 27th of last month, the city of Beijing announced, “Restrictions on home purchases in the event of divorce are no longer in effect.” In the past, when the real estate market was booming, many Chinese people faked divorces to avoid restrictions on home purchases per household. Accordingly, in order to prevent real estate speculation, the authorities have banned divorced people from purchasing additional homes for the next three years from August 2021. This rule has been removed.
However, there is no noticeable recovery movement in the real estate market yet. According to the China Real Estate Information Company (CRIC), new home sales at the top 100 real estate companies as of the end of March plunged 45.8% compared to March last year. On the 28th of last month, international credit rating agency Fitch also raised its forecast for a decline in new home sales in China this year from ‘0 to 5 percent’ to ‘5 to 10 percent.’
Meanwhile, Shimao Group, a Chinese real estate development company, announced in a public notice on the 8th, “China Construction Bank has submitted a liquidation petition to the Hong Kong High Court against the company for failing to repay its loan.” Shimao ranked 20th in the real estate industry, and Chairman Xu Rongmao ranked first in China in terms of real estate assets in 2009.
Smao fell into default in July 2022 as it was unable to repay principal and interest worth 1 billion dollars (about 1.35 trillion won). Since then, negotiations have been underway with creditors to restructure all offshore debt worth $11.7 billion (approximately 15.8 trillion won). The BBC said, “It is very unusual for a Chinese state-owned bank, rather than an overseas creditor, to request liquidation of a domestic development company.”
Hengda, a large Chinese real estate company, was decided to be liquidated by a Hong Kong court in January this year. With the industry’s No. 1 company, Biguiyuan (Country Garden), also scheduled for a liquidation hearing in May, concerns about a ‘domino default’ in the Chinese real estate industry are growing again.
Reporter Kim Cheol-joong [email protected]
-
- great
- 0dog
-
- I’m so sad
- 0dog
-
- I’m angry
- 0dog
-
- I recommend it
- dog
Hot news now
2024-04-09 14:45:31