Thousands of would-be home buyers are banding together in China to negotiate discounted prices with real estate developers in a unique solution that some hope could help prevent a property market crash.
China has so far escaped the worst of the global credit crunch, but borrowing conditions have been tightened to fight inflation — keeping many consumers off the property ladder.
At the same time, overstretched developers are unable sell houses to generate revenue — or borrow more money from banks — so they can pay down their debts.
Since July, more than 30,000 people have signed up to the ‘Housing for 10,000’ a group buying web site created by Zou Tao, a 34-year-old activist in Shenzhen, a booming city across the border from Hong Kong.
He said of those who signed up, about 500 have already succeeded in buying homes from developers at discounts ranging from RMB50,000 to RMB100,000 ($7,350 to $14,700), he said.
Others have since copied the model in cities such as Xian, Wuhan and Jinan.
Source: The China Post