Chinese developers under pressure to lower prices at new projects, says Longfor CEO Shao Mingxiao
Shao Mingxiao says life is becoming tougher for builders after a slew of government measures to take the heat out of the marketHe believes the government will ensure home prices slip gradually rather than collapse
Home prices in China will continue to fall, as new projects in particular face slowing demand, according to the boss of one of the country’s biggest property developers.
Shao Mingxiao, CEO of Longfor Group, said life is becoming tougher for builders after a slew of government measures in recent months to take the heat out of the market.
“We see that the purchase cycle, from visiting a project to sealing the deal, has become longer as buyers are getting cold feet. Doing property business will be more difficult,” said Shao.
“We will consider adjusting prices at some new projects. But we will not lower prices of those we’ve already started selling as it would cause damaging results.”
China has seen angry protests erupt previously when developers have cut their prices at a project when sales are already under way.
In October, buyers who had paid full price for flats at two projects in Shanghai and Jiangxi reacted furiously when Country Garden Holdings, the mainland’s largest developer by sales, slashed prices by up to 30 per cent. Scores of people who had paid the original price gathered to protest, brandishing placards and chanting “return my hard-earned money!”