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Visitors look at a model of a housing project at the Beijing Spring Property Expo, which opened on April 5, 2012. [Photo/China Daily]
Favorable terms help attract potential buyers at housing expo
More property developers are offering a variety of favorable terms to attract homebuyers at the ongoing Beijing Spring Property Expo - the barometer of the capital's real estate market.
According to the expo's organizer, a total of 45 property projects in Beijing are taking part in the event, and the biggest discount being offered is 8 percent.
Zheng Xiangdong, head of Beijing JiaHua Four Seasons International Exhibition Co Ltd, the organizer of the expo, pointed to an obvious increase in projects offering discounts.
"Most of the projects offered discounts ranging from 2 to 6 percent," said Zheng.
Meanwhile, some banks, especially those that have a good business relationship with leading property developers, are offering discounts of up to 15 percent on mortgages for first-time buyers.
A project located between Beijing's East Fourth Ring Road and the Fifth Ring Road offered nine apartments at the expo at a unit price of 19,999 yuan ($3,174) per square meter, while the average price in that area ranges from 24,000 yuan to 25,000 yuan per square meter.
"We sold seven apartments on the first day," said a salesperson, adding that none of them was purchased for investment purpose.
The favorable terms are helping attract potential homebuyers. Statistics from the organizer show that 32,750 people visited the expo on Thursday, the first day of the four-day expo, a number up 102 percent from last year's event.
However, for Zhao Xiao, a middle-aged Beijinger who plans to buy an apartment for his son, the current prices are still a bit too steep.
"But the market is really hard to forecast, especially in Beijing," said Zhao.
A recent online survey by SouFun Holdings Ltd, the country's largest real estate website, showed that about 50 percent of netizens said prices will only be affordable if they fall by at least 30 percent.
Carlby Xie, head of research at the real estate consultancy Colliers International (Beijing), said a 10 to 20 percent drop could be in the cards before property prices become stable.
"I believe the best buying opportunities will emerge between now and the end of this year," Xie added.
According to research by China Real Estate Research Institute, China Property Association and China Real Estate Valuation Center, the average value of unsold products at the country's top 500 real estate companies in 2011 was 50.34 percent higher than in the same period of 2010.
The rules of the game in the real estate market have changed. It is now impossible for property developers to rely on the fast appreciation of land and house prices as they did in the past decade. They will have to tailor their products to meet market demand, according to the research.