Would you take the developer up on offer?

A Chinese property developer is offering a BMW 3 Series or a BMW X1 to anyone who buys a three-bedroom unit or townhouse at its development property in Shanghai. The developer, China Merchants Shekou Industrial Zone Holdings Co., is pulling out all the stops to lure buyers in the wake of lending curbs and funding constraints that have squeezed their finances. The giveaway is just one example of the lengths Chinese property developers are going to for the sake of boosting sales.

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Would you take up China Merchants Shekou Industrial Zone Holdings’ offer of a BMW 3 Series or X1 to buy an apartment or townhouse in its swanky building? It sounds like a good deal, at least until you realize that the units actually cost 3.1 million yuan.

Throw that number in the currency converter machine, and it’ll spit out around $621,000.

That, by the way, is for an 89-square-meter apartment, which is roughly around 957 square-feet. Not exactly as sweet of a deal as you thought, is it?

The truth is, that’s how the real estate game is playing out in China these days. Developers have resorted to offering freebies like free BMWs just to entice would-be buyers to sign on the dotted line. It’s not just free luxury items, either. Hefty discounts have become prevalent offers among developers. According to The Business Times, the Chinese developer is throwing in perks that could cut the cost of buying its properties by as much as 26 percent. It’s even throwing discounts to buyers referred by company employees. And accepting down-payments of as little as five percent, a steep drop from the usual 30-percent deposit required by local governments in the country.

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All the giveaways and discounts are part of last-ditch strategies among developers that have suddenly found themselves debt-laden and tight on cash. It’s become a prevalent issue in China among property developers, at least according to Sabrina Wei, head of Northern China research at Cushman & Wakefield in Beijing. “Financing is becoming hard for everyone, even including the giant players," Wei told The Business Times. "They need discounts to boost sales and collect cash."

The cooling property market is evident in China Merchants Shekou’s development where only 25 of the 235 apartments have been sold.

It’s not just China Merchant Shekou, either. Rival developers like Gezhouba Real Estate and Sanding Impression Co are experiencing similar buyer droughts. Gezhouba’s 223-unit project in west Shanghai only has eight buyers so far while Sanxiang’s 161-unit complex has been filled up by a total of five buyers.

The buyer drought is real, and that explains why these companies are resorting to throwing in freebies like free BMWs to get people to buy their units. Who knows, if they can’t find takers with these free Bimmers, they might as well start offering free Bentleys or Rolls-Royce models.

Further reading

A Chinese Property Developer is Offering a BMW If You Buy Its Property High Resolution Exterior
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Read our full review on the 2016 BMW 3 Series.

2016 BMW X1 High Resolution Exterior
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Read our full review on the 2016 BMW X1.

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Read more BMW news.

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