Home price-cuts get steeper, more extensive in China

Just like what China's millions of homebuyers have long expected, a nationwide price cut in new home sales has finally begun, as increasing inventories and continued government curbs are pushing Chinese property developers to court more buyers. China Vanke, the country's largest real estate developer by market value, led the wave of sales by lowering prices of their housing projects in Beijing and south Guangdong province starting this month. In Beijing, new houses of Jinyu Vanke city in Changping District will be sold at 14,000 yuan (2,204.7 U.S.dollars) per square meter in November, which is a 3,000 yuan's drop. It has attracted more than 600 house hunters. At the same time, the company has also reduced the prices of its projects in southern Guangdong province by selling its Vanke Zitai, or Glorious Palace, in Dongguan at 13,0000 yuan per square meter, down from the previous 15,000 yuan. China's leading property developers are taking the same steps, with Agile Property, Capital Group, Evergrande and R&F Property, all reported to have cut price to reduce inventories and boost sales volumes. But in Shanghai, the strategy of price-cuts seemed to have met obstructions. When China Overseas announced a 30-percent discount on group sales promotion in its Scenic West Coast project late last month, more than 400 of its existing homeowners protested furiously and threatened to sue the company. China Overseas' sales campaign did not last long, as local government has required developers to file applications to regulators before carrying out large-scale price adjustment, whether it's a rise or a reduction. China Overseas was not the only property firm that has sparked disputes over house price cuts in Shanghai. At least four real estate projects that cut prices sharply were reported to have faced strong protests.