Chinese developers plan online auctions: report
Twenty Chinese property developers, faced with slumping sales and prices, plan to hold online auctions in an attempt to attract more home buyers to their showrooms, state media said Wednesday.
Companies, including SOHO China and China Vanke, the country's largest property developer, will each provide five apartments "periodically" for auction, with the opening bid price set at zero, Beijing Morning Post said.
"The transactions will bring more clients to our showrooms," Zhou Xin, chairman of Shanghai-based real estate group E-House China, was quoted as saying.
But Zhou warned that property developers must be "psychologically prepared" to accept an offer of as low as 20,000 yuan ($3,135) for a large apartment -- almost the same as the cost of one square metre in Beijing's property market.
SOHO China declined to comment when contacted by AFP, while calls to China Vanke and E-House China went unanswered.
A slowdown in China's property market, a mainstay of the world's second-largest economy, could have a knock-on effect on the global economy, analysts warn.
Tough government restrictions on property purchases and bank lending have triggered a nationwide fall in sales volumes and prices, fuelling fears the market could collapse and send debt-laden real estate developers to the wall.
A surge in bank lending in recent years has fuelled investment in the real estate sector and pushed property prices out of the reach of many ordinary Chinese, angering people struggling to buy their first home.
Official data showed the number of major Chinese cities posting a drop in home prices doubled to 34 in October from September, in a sign efforts to cool the country's red-hot property market were working.
Despite concerns of a damaging slump in prices, top Chinese leaders have vowed to maintain measures such as bans on buying second homes in some cities in the hope that apartments will become affordable for more people.
© 2011 AFP