Offers of a giveaway household appliance or vacation getaway are no longer particularly unusual from developers looking to buck China’s housing slowdown. But one sales team is really going the extra mile to get attention – throwing in a free girlfriend with the purchase of every new home.
According to the Real Estate Times, a developer in Beijing has promised each female sales employee a bonus of Rmb80,000 if they agree to become the girlfriend of a homebuyer. In a country with lots of empty apartments and plenty of frustrated bachelors, the commercial logic is solid enough, even if the moral premise might need a rethink.
Zhao, one of the sales ladies in question, said her mother had actually recommended that she take up the company on its offer. But business was still slow: so she, along with several female colleagues, had decided to resign.
After nearly two years of attempts by the central government to cool the overheated sector, the market appears to have turned. Sales volumes slid first but prices are now falling as developers try to tempt reluctant buyers with discounts. But homebuyers seem to prefer to wait on the sidelines. Only 14% of households say they will consider buying homes over the next few months, according to a survey by the central bank. December data showed the fourth consecutive month of price declines (averaged across 100 cities) as measured by the China Real Estate Index System. In November, more than half of the biggest 70 cities recorded falls.
All this at a time when the economy is slowing (see Talking Point), although Beijing hopes that the construction of social housing will help pep things up. Back in October, the central government declared that a target of starting work on 10 million social housing units for the year was 98% complete. The goal is to complete 36 million units by 2015 (the target for this year is to start construction of 8 million units).
These numbers might be overstated, as at least one official has admitted that work on a third of the units has not got beyond digging holes in the ground. Newspapers have also been mentioning Mao Zedong’s Great Leap Forward of the late 1950s, when local governments vied with one other in their increasingly implausible claims of soaring steel output. “This kind of farce is showing signs of making a comeback,” wrote a columnist in Panyu Daily. In September alone Guangdong’s fulfillment of its own quota for the year increased from 66% (the country’s lowest rate) to 96% – indicating either superhuman activity or some creative statistics.
In Chongqing, one of the country’s most ambitious social housing projects is also under way. Under mayor Huang Qifan’s plan, the city will construct 40 million square metres of subsidised housing. To put that in perspective, it’s an area 10 times larger than New York’s Central Park.
Clearly that could well be more bad news for local property developers, who must be concerned that a glut of cheaper housing will undercut demand for their own new property.
But Huang denies that his plans could turn a slowdown into a crash. “We don’t hope to see bubbles, nor do we hope to see the collapse of the market,” he told the Wall Street Journal recently. But he also insisted he had a “very sacred responsibility” to ensure that homes were offered for sale at an equivalent of six or seven years of family annual incomes.
His aim is to achieve a blend of commercial and subsidised housing where the latter makes up between 30-40% of Chongqing’s total.
Other property firms are returning to the relationship angle to try to boost sales, appealing to another promising demographic: rich, adulterous husbands. “If you can’t give her status, give her a house” is the slogan of one new apartment complex in Shandong, which styles itself as designed for illicit love. Another developer is even more explicit: it claims that its 50-square metre apartments are “a preferred love nest for your mistress”.
© ChinTell Ltd. All rights reserved.
Sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.