Huge inventory and depreciation pressures are triggering a new round of fierce competition in Beijing’s housing market.
After Vanke, China’s largest residential real estate developer, further cut prices at the beginning of the year, other first-class developers, among them Zhujiang, Poly, and Coastal, have had no choice but to follow suit, and the capital is now witnessing a housing price war that must have buyers in a state of delight.
‘The pressure is huge, and we’re going to sell all our apartments within three months. If everything goes smoothly, the company will get back RMB1.9 billion,’ a Poly insider revealed to China Business News.
Poly has formulated a ‘tough’ sales plan for Jinquan International, its real estate project near Asia Games Village. Prices for the project were once as high as RMB25,000 per square meter. It was rumored earlier that the average price for newly finished apartments would be cut to RMB20,000, but in fact, per square meter prices have plummeted to RMB15,500.
To recoup funds as quickly as possible, Poly has hired two intermediaries to sell another of the company’s real estate projects at the same time.
Zhujiang has cut its prices to around RMB17,000 per square, about RMB6,000 lower than the peak price. Another of the company’s projects opened yesterday at RMB10,800 per square meter, surprising low.
‘As the apartments are well-decorated, if we cut the decoration expense by RMB2,000 per square meter, the real price is only RMB8,800, RMB3,000 to 5,000 lower than prices of neighboring buildings, said an industrial insider.
Liu Zhilong, sales supervisor of this project, said the company aimed to unload all the apartments within the year.