You know it’s a bad sign if your local real estate agent is giving away BMWs. But that’s exactly what Lin Zhangzhong is doing in the Chinese city of Wenzhou. He’s offering a Bimmer for the first 150 customers who buy a new apartment.
"People are excited and are coming because our BMW giveaway," he says, "After all, it is BMW."
It’s also a signal that China’s property market could be in for a rough ride.
"Everyone is watching housing prices in China. People are worried that the market is a bubble and could come crashing down. The agents here say the prices have already fallen by 20% so far this year. "
Chinese real estate is a key driver of global growth, accounting for about 1/5 of China’s economy, helping to lift prices of steel, cement and other materials at a time when countries in the west are losing steam. In recent years home prices in manufacturing towns like Wenzhou have been soaring. But with the government concerned about inflation, reinning in lending and restricting sales, demand for apartments is on the decline, prompting agents like Lin to throw in a free luxury car with 10% of one of his new flats.
"Homes are harder to sell than before," he says.
After the policies were enacted last year, it created a very unstable situation for real estate market. That instability might not be such a bad thing. Housing has been increasingly out of reach for the vast majority of people here, a concern for authorities looking to prevent any social unrest.
"The government should definitely be doing more,"this laborer says, "We work so hard, it’s nearly impossible to afford to live anywhere."
To ward off those complaints, Beijing pledges to continue its campaign to calm prices, and move investors hope it won’t tank China’s economic engine when the rest of the world is trying to stay afloat. Eunice Yoon, cnn, Wenzhou.
