Sixth Tone (October 7) quoting The Paper (October 6) reported that cities across China are
resorting to pressuring groups of state-sector workers to buy up unsold housing stock at
discounts of up to 30%, as local governments struggle to jump-start flatlining property markets.
It said China’s real estate sector is mired in its worst debt crisis in decades, with developers
across the country defaulting on payments and halting construction on new projects. The
turbulence has triggered a wider loss of market confidence: Land and property sales have fallen
by double-digit levels in 2022. The Paper added that local governments are under pressure to
get the market moving again, which is leading many to create “group buying” schemes, where
employers — normally state-sector entities — are offered steep discounts if large numbers of
their staff agree to buy properties. The Paper said more than 20 cities have launched group
buying property programs since June, including in China’s remote northwest and eastern
coastline, many are small, third- or fourth-tier cities. The list includes several provincial
capitals, including Shenyang, Liaoning province, and Nanning, Guangxi Zhuang Autonomous
Region. In several cases, cities are explicitly targeting their group buying schemes at state- sector workers, with real estate companies encouraged to hold marketing events for local
governments, state-owned enterprises, and other public sector institutions. Discounts offered
on group purchases vary by city. For example, in Huanggang, in Hubei province, real estate
companies are required to cut prices by at least 3% if groups of more than 20 people agree to
buy apartments. Wuzhou, in Guangxi, is offering discounts of up to 30% when groups purchase
more than five units. Chen Xiao, a senior analyst at real estate platform Zhuge Zhaofang, told
The Paper that the cities offering these schemes tend to have particularly high numbers of
unsold properties.
(Comment: Sixth Tone is a subsidiary of The Paper.)
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