In an attempt to revive the sluggish real estate market, Chinese property developers have come up with an innovative solution to lure home buyers: gold bars. The offer seems to be working as it sparks interest and has the potential to excite buyers.
According to reports, a property developer based in the southern city of Guangzhou offered gold bars to potential buyers who purchased property worth over 10 million yuan (approximately $1.5 million). The gold bars weigh around 100 grams, and home buyers are promised that they would be delivered to them for free at the time of occupancy.
This move was seen as part of a wider incentive package to encourage property purchases. In addition to gold bars, the developer also offered discounts of up to 25% on certain properties, flexible payment terms, and no down-payment plans to attract buyers in a sluggish real estate market.
The property market in China has been showing signs of a slowdown, with tighter regulations on property purchases and increased scrutiny over the sources of funding for developers, making it difficult for them to secure financing. In this scenario, offering incentives such as free gold bars serves as a means to attract potential buyers and generates hype for the project.
A spokesperson for the Guangzhou developer said that the offer was “merely a bonus,” and that the pricing of the properties would not be affected. “Our prices are determined on the basis of market conditions, and they will remain unchanged,” said the spokesperson.
This offer has raised some concerns among China’s central government, who have been tightening regulations over household debt. The government issued a series of measures in December 2017 to rein in property bubbles in more than 130 cities, including increased scrutiny over developers’ financing practices and demanding higher deposit ratios for buyers.
The use of gold bars as a lure is not a new phenomenon in China’s property market. In 2016, a developer in eastern Anhui province offered a 5-gram gold bar to customers who had purchased apartments of at least 90 square meters before the end of that year.
While the use of gold bars may seem like an unconventional tactic, it highlights the challenges property developers are facing in a slowdown market. Experts warn that the use of gimmicks such as these to attract buyers could lead to a further crisis in the property market and the economy as a whole.
In conclusion, the use of gold bars as a lure by Chinese property developers to attract home buyers signifies the pressure they face to revive the sluggish real estate market. While this tactic may temporarily generate hype, it could also lead to more challenges and a possible further crisis if the underlying issues of market slowdown and government regulations are not addressed.