In the latest sign of Chinese developers’ desperation to unload inventory into a weak property market, China Vanke Co is offering discounts of up to $325,000 to homebuyers who shop on Alibaba’s Taobao, an e-commerce platform.
The country’s biggest developer will give discounts that match shoppers’ spending of up to Rmb2m ($325,000) on the eBay-like service. Homes in real estate developments in Beijing, Shanghai, Guangzhou and Chongqing, among other cities, will qualify, according to an advertisement on Taobao’s website.
Developers began cutting prices this year but have so far failed to revive flagging volumes. More than 30 cities have also removed purchase restrictions introduced in 2010 to restrain price growth amid public anger over high prices.
One line from Sina to sum up the situation:
Financing is increasingly difficult, tighter capital chain like a sword of Damocles hanging over the head of the real estate industry.
On mortgages: costs are coming down, with first-tier cities now seeing lower costs than second-tier cities. In the short-term though, banks aren’t doing much else to relax lending.
Overall, the effect of the lifting of buying restrictions has been limited, but as I’ve said plenty of times, we’ll know the real situation come September and October.
Meanwhile, the signs of a lending rebound in August after the July wipe out and not good, from QQ:
According to the new financial reporter, as of August 17, the four bank deposits negative growth of nearly 530 billion yuan, of which nearly 250 billion reduction in the Bank of China, ICBC reduction of nearly 130 billion CCB reduce 100 billion, the bank reduce 50 billion. Meanwhile, the first two weeks of August, the four lines only 56 billion yuan of new credit scale.
This could be misleading. We know from experience that Chinese banks tend to lend in a rush at month end.