'Tough love' policies cool passion for property

Little choice

Senior sales agent Lu Changhong, 32, said bigger discounts and more advertising gimmicks will be churned out because "property developers have to" use them.

Housing sales information is posted in unlikely-seeming places - here, on a pedestrian overpass in Beijing - but sales agents want it to be noticed. Transaction volumes slumped this fall. Wang Jing / China Daily

"They have to pay bank loans, pay salary to construction workers, and bid for land when the land price is discounted at year-end," Lu said. "As a result, property developers will continue the big sales. In my eyes, it is a win-win choice for both the developers and most buyers."

A survey conducted by Sina.com's home channel shows that as of June 30, more than one-third of the nation's 189 listed property developers had a debt-to-assets ratio above 70 percent. Separate data from Wind Information Co Ltd show that at the same time, those developers' combined debt totaled 1.24 trillion yuan.

"Capital conditions are the top secret of a company, but by noticing the projects giving the most extended discount, we can tell which company is short in capital flow," said Huang Zhijian, Uwin's executive director in Shanghai. "As to lowering project prices, it is the least thing a property developer will do." Huang said a big price cut for every single project is impossible, "but a majority of the projects will follow the trend".

Considering the central government's steadfast approach to cooling home prices, more major property developers will promote sales through diverse measures over the next three months, said Chen Sheng, deputy director of the China Index Academy in Shanghai. They need to keep their heads above water.

Shen Chen in Shanghai contributed.

Write to the reporter at wang_ying@chinadaily.com.cn.