China Jinmao Selling Xiamen Homes For Less Than Land Cost As Market Skids

Demand for homes is slipping in mainland China and state-owned China Jinmao Holdings seems to be finding out how low prices can go as the developer has begun selling homes at a project in Xiamen for less than the price that it paid to acquire the site, according to a local media report.

China Jinmao has been “selling bread for less than the price of flour” in industry terms since mid-October, with the apartments in the Xiang’an Jinmao Yue project now selling for an average of RMB 28,000 ($3,575) per square metre, or five percent less than the RMB 29,451 per square metre of built area that the developer had paid when it acquired the site last year.

While the discounts on China Jinmao’s project in the Xiang’an area of Xiamen are dramatic, the drama is based on an increasingly common theme, as the city of 3.5 million people in Fujian province has gone from having some of China’s fastest growing home prices to seeing housing prices drop in two of the past three months, after central authorities began a policy enforcement campaign in the second half of this year.

Jinmao’s current selling price at its suburban project is now 32 percent less than the planned RMB 41,244 per square metre price that the developer had received government permission for before the 71,000 square metre development was launched.

The reality of Jinmao’s RMB 28,000 per square metre Xiamen sales stands in contrast to the optimism that the developer displayed fourteen months ago, when it bid 40.2 percent above the auction minimum to acquire the 25,436 square metre waterfront site for RMB 2.09 billion in September 2017.

Ref:  Property Report