China's policies have been aimed at making things fairer for all the people in the country. It hadn't been good for business, however, as A Times revealed. Just to make ends meet, people have been doing all sorts of gimmicks. One developer has even resorted to using attraction to sell condos, using female models to cater to interested investors.
Using 'strategically' placed advertisements, the company invited investors to trust the company. The model advertised floor plans of homes and even used 'creative' methods to remind interested persons of the company. While it is unclear whether any units ever managed to sell, the company succeeded in drawing a huge crowd to its sales center.
Perhaps, the policies can be blamed for the developer resorting to such advances, but the company has more problems to deal with. Thanks to this method, its license had been suspended until further notice. That is another problem altogether; the real issue is that it was suspended in the midst of a real estate market that's getting more controlled as time passes by.
The Central Government, according to Zero Hedge, made sure that prices were being controlled to the point that it was easier for people to purchase new properties. However, that also means that home prices are expected to adjust accordingly. Price increases have been tabulated during the past months of 2018, with values rising to figures in the 1.1-1.5 percent neighborhood.
The government's policies have created conditions where housing inventory had risen because people would be waiting for higher re-sell prices before investing. It had created peak volumes and sales growths have been slow as a result. Beijing, the capital, even posed flat sales figures in August even though there were new homes being built.
Sales growth were also slowing down, with the central and western regions of China enabling a 4.0% growth year-on-year. That still wouldn't be able to stop an August slow-down to the tune of a 2.4% year-on-year rating, which had shown the dire straits the sales market found itself in.
The situation would flatten out, no doubt. However, cheesy, license-banning gimmicks aside, China should propose a workaround to the policies. It is needed in order to protect not just its citizens, but its investors and those interested in Chinese investments as well.
