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Chinese property developers may be forced to embrace steeper price cuts, broader promotions or a change in strategy in the third quarter as they scramble to meet 2014 sales targets after many achieved less than 30 per cent of their forecasts in the first five months - PHOTO: REUTERS
[HONG KONG] Chinese property developers may be forced to embrace steeper price cuts, broader promotions or a change in strategy in the third quarter as they scramble to meet 2014 sales targets after many achieved less than 30 per cent of their forecasts in the first five months.
Price cuts would help boost sales and lower inventories, easing an oversupply of housing in the world's second-largest economy. The cuts could however, come at the cost of profitability for many developers.
Some developers are opting to adjust their strategies by introducing more basic housing where demand is solid compared to luxury apartments and by turning to commercial projects.
"We are seeing more developers changing to renting their properties from selling because the market is very slow. By renting they can at least get some revenue," said Raymond Wei, the Shanghai-based general manager for the commercial sector for realtor Centaline Property Agency Ltd.
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