Looking to Buy a Home in China? It Might Come With a Gold Ingot.
As China’s real estate market continues to falter, a property developer in the eastern city of Hangzhou is offering hesitant buyers an eye-catching perk if they sign for a new property: a solid gold ingot.
The offer is the latest creative tactic used by a Chinese property company to circumvent local pricing restrictions. Many cities have banned unapproved real estate price cuts, as they try to shore up market confidence.
But developers are under pressure to revive their sluggish sales, with new property purchases down 15-18% month-over-month during the first three weeks of May, according to data provider China Index Academy. That’s leading firms to offer discounts on properties by stealth — often throwing in freebies worth tens of thousands of dollars to entice buyers.
The offer of free gold is the strangest yet. The developer, Hangzhou Hua’an Property Company, recently started promoting the deal at a new development in Lin’an District, around 60 kilometers from downtown Hangzhou, domestic media outlet Jiemian reported.
The bigger the apartment, the more gold buyers will receive, according to the company. Customers who purchase a 100-square-meter property will be given 1.05 kilograms of gold, which has a market value of over 470,000 yuan ($66,000).
Apartments of that size in the development are priced between 2.2 million and 2.5 million yuan. So, in effect, buyers who receive the free gold will enjoy a discount of around 20%.
This is far from the first time developers in Lin’an District have offered large sweeteners on deals for new properties. Hangzhou Hua’an previously offered buyers free home decoration services, which were worth an estimated 300,000 yuan for a 100-square-meter apartment.
Local real estate agents told Sixth Tone that most developers in the area are offering “disguised discounts,” as market sentiment remains jittery.
“The gold offer hasn’t yet helped people make up their minds,” one agent, surnamed Zhang, told Sixth Tone. “There are many other options in the district. And given how the market is, buyers are not in a hurry to make a final decision.”
Just three kilometers away from Hangzhou Hua’an’s development, another new residential compound is offering free home decoration, parking spaces, a 10-year waiver on property management fees, and five cell phones to anyone who buys an apartment. The developer, Hangzhou Yuejia Real Estate Development Corporation, claims that these discounts are worth a combined 600,000 yuan.
Similar offers have appeared in cities all over China. In recent months, developers in Guangdong and Jilin provinces have even reportedly been advertising “zero down payment” deals.
These dubious arrangements see developers deposit a lump sum of cash into buyers’ bank accounts, which the buyers can then use to pay the down payment. In other cases, developers give homebuyers a free car with the same value as the down payment.
In Hangzhou, local authorities haven’t yet responded to the promotional tactics being used by developers in Lin’an District. But buyers who purchased apartments before the free gold offer was introduced are reportedly furious.
“It’s the worst investment I’ve ever made in my life,” one buyer who signed for an apartment at Hangzhou Hua’an’s development last year told Jiemian.
Editor: Dominic Morgan.
(Header image: aluxum/VCG)