Buy a home, get a cow

Source : Today - 1 Oct 2008

Property developers pull out all stops to boost sales

CHINA’S property market is facing a downturn. This has prompted some Chinese developers to resort to publicity stunts and even gimmicks to revive interest among prospective buyers.

Following a slowdown in June, the property market in China is expected to remain sluggish in the last quarter of this year. In its report, Singapore’s DBS Group Research noted that the volume of property sales in nine Chinese cities under its coverage fell by more than 60 per cent in August from the corresponding month a year earlier. The plunge in Beijing was 72 per cent, but this was partly due to the Olympics.

The DBS report noted that while potential homeowners are holding back from buying due to expectations that prices will fall, many developers are reluctant to lower prices, fearing this could further dampen sentiment.

To counter the slowdown, property developers have pulled every trick out of their bag. One developer in Nanjing has offered to give away a free cow - a living breathing cow - to those who buy a new home. The developer was said to have reached an agreement with a farm to supply the bovines.

The developer described the move as “timely”, given public concerns about the safety standards of dairy products in China. Acknowledging that it is impossible to keep a bovine in a high-rise apartment, the developer said: “The idea is for homeowners to adopt a cow, leave the care of the cow to farmhands and have fresh milk delivered to their doorsteps every morning.”

The developer also pledged that “further discounts will be offered if homeowners do not want a cow”.

Another developer in Nanjing used creativity in its ads to attract buyers. In its ad, the commercial real estate developer declared that “our ovaries are ready and all sperm are welcome”. Punning on the Chinese word for “sperm”, the ad was actually referring to its target market of “elites”, who are likely to fill up its office space in an area known for high-tech incubators and start-up firms.

And the ads have generated a huge response - from supporters and detractors. While some agreed that it was clever and eye-catching, others said it was “probably one of the most distasteful ads ever seen”. How that is going to be translated into sales remains to be seen.

Even renowned Chinese property developer Pan Shiyi has jumped on the publicity bandwagon. The chairman of Hong Kong-listed Soho China pledged to build ten “internationally advanced high-standard” toilets in impoverished rural schools in China’s vast western provinces. Each toilet is expected to cost 18,000 yuan ($3,760). In his blog, the property mogul wrote: “We build homes for the richest in China and build toilets for the poorest children in the country. Undertaking work with such great extremes means that we help society to progress and advance.”

But Mr Pan’s move was heavily criticised for its impracticality. Critics said maintaining the toilets would add to the financial burden of rural schools, many of which are already struggling to get by.

Some accused Mr Pan of seeking publicity for himself and his company, adding that “by selling one bungalow to a rich Chinese, the property tycoon would have recouped the cost of building the 10 toilets”. Others argued that the money could have been put to better use by giving more rural children the chance to attend school.

While the publicity stunts and gimmicks may have attracted much attention, other developers are calling for more practical measures to spur sales.

To give the flagging market a much-needed boost, the China Real Estate Association has petitioned the central government to relax its austerity measures. The association also called on the central government to allow local governments the discretion to boost the market, such as lowering taxes for real estate transactions.

But despite the current slowdown, many analysts are confident that China’s property market will revive next year, given the country’s rapid urbanisation and the likelihood that the government will loosen credit controls.