China's home developer Evergrande offers 25% off amid virus outbreak

By Huang Ge Source:Global Times Published: 2020/2/16 21:37:03

Evergrande Group. Photo: VCG

China's leading property developer Evergrande Group announced Sunday it is set to launch great incentives to lure domestic consumers via online subscriptions starting Tuesday, and an analyst said such a "self-rescue" promotion would attract more industry followers and help shore up the sluggish domestic housing market in February amid the novel coronavirus outbreak.

Evergrande plans to offer 25 percent off for consumers who purchase housing units, including apartments and office buildings, from Tuesday to February 29.

The discounts will continue and be adjusted to 22 percent off from March 1 to 31.

It will be the largest incentives the firm has offered in its business history, Liu Xuefei, vice president in charge of sales with Evergrande, told an online meeting on Sunday.

Since Evergrande started online sales promotion Thursday amid the novel coronavirus outbreak, the number of apartments subscribed online was 47,500 units from more than 600 housing projects the company has nationwide, worth 58 billion yuan ($8.3 billion), according to the company.

Consumers who pay 5,000 yuan ($715.6) down payments and sign subscription books on the company's online platform Hengfangtong, can preorder housing resources from projects the company has across the country, said Evergrande.

From the day that consumers sign contracts until May 10, they can enjoy a right to buy at the lowest price - if the price on the home they buy goes down, they can obtain the difference and can return the apartment.

"Online promotions by real estate companies do not affect the domestic housing market that much, but if one can preorder an apartment with a 5,000-yuan down payment, the stimulus will be quite large and will attract many first home buyers who have rigid demand," Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told the Global Times on Sunday.

"I found Evergrande's promotion ad on WeChat moments and the incentives are quite attractive. I cannot remember such large discounts a Chinese developer offered in recent years," a Beijing resident surnamed Lei in her 30s told the Global Times on Sunday.

"If there were no restrictions on second-home buyers in Beijing, I would book one," she said.

Evergrande's incentives will help it drive sales volume and many other domestic housing developers are more likely to follow suit, experts said.

China's home market seems likely to recover in the second quarter if the virus can be contained by March, Yan said.

Yan, describing Evergrande's new policy as "self rescuing," noted that instead of waiting for government support policies, domestic real estate companies should take the initiative to actively reduce housing inventories and stabilize their cash flow.

Due to the viral epidemic, local housing authorities have requested companies to shut down sales centers across the country, which has taken a heavy toll on domestic property developers.

In a bid to respond to negative impacts on domestic housing market from the virus, many domestic housing companies such as Poly, Midea Real Estate and China Jinmao have launched online services such as consultancy, apartment tours via virtual reality technology and home price calculation.


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