When New Century Real Estate cut its housing prices by 15 per cent two months ago, the Chinese developer, far from panicking, was in a triumphant mood. It believed the discount was a deft move to get ahead of the market and sell its unsold backlog of apartments.
Chinese property companies have reduced prices on only the rarest of occasions over the past decade, during which time average property values have more than doubled. New Century calculated that its cut – at the Mingjun residential complex in the eastern city of Hangzhou – would attract a flood of interest. It was right, at first.
The number of people viewing properties quintupled overnight, according to Luo Chengwu, an operations manager.
Yet by the first week of May, the initial excitement had subsided. Other developers around the city of Hangzhou had also lowered their asking prices and New Century’s offer was no longer so unique.
“Yes, we attracted a lot of customers when we made the announcement. But since then, it’s just been OK, not crazy. We’ve not been able to sell everything out,” said a saleswoman in the Mingjun showroom, pointing to the dozens of homes still available in a model of the 14-tower complex.