Chinese developer offers discounts for apartments

Shanghai

CHINA Evergrande Group must have a feeling this year is going to be tough.

The Chinese property developer and wannabe electric-car maker kicked off a nation-wide sales promotion, just hours after forecasting the slowest annual home-sales growth in years.

From now until Feb 20 - a period that incorporates Chinese New Year - buyers can get a 13 per cent discount on Evergrande apartments around the country.

Other sweeteners include a 5 per cent discount for buyers referred by a company employee and a 7 per cent discount for those making lump-sum payments.

While the company routinely offers discounts around the week-long Chinese New Year holiday - a popular time to shop for apartments in China - this year's promotion has come earlier and lasts longer.

On Thursday, Evergrande unveiled its weakest annual sales growth target in eight years. The home-builder is targeting 650 billion yuan (S$126 billion) in contracted sales for 2020, 8 per cent higher than 2019.

That is the most modest rise since 2012, Bloomberg calculations based on company data show. The developer sells mainly mid-range units in both large and small cities.

Against the backdrop of a lacklustre market, home buyers can probably expect even deeper discounts.

Home-price growth in China slowed for a sixth straight month in November.

The most evident decline was in second-tier regional economic hubs, even as some of those cities made it easier for people to obtain highly sought-after residency permits, which have the potential to spur sales.

Evergrande's Hong Kong-traded shares slipped 2 per cent on Friday, the worst among major Chinese developers. The stock was down 7.9 per cent in 2019. BLOOMBERG