Chinese Developers Offered Porsches to New Flat Buyers

China Developers Offered Porsches to New Flat Buyers 1 photo
Photo: Catalin Garmacea/Autoevolution
By now, you may have learned that China is the world’s second-largest economy by total nominal GDP and largest by purchasing power parity. Like any other society, this incredible pace of development also implies a significant urbanization, with the population living in urban areas increasing from 20% in 1990 to over 50% in 2014. This economic shift also meant there’s an important opportunity for the country’s big developers.
Estimates show that China’s urban population will reach one billion in 15 years, which, in theory, will be equivalent to one-eighth of the world population. This means there are a lot of people that need a place to live in. Sure the economic grounds of it are a lot more complicated, but urbanization is one of the reasons developers have grown in scale accordingly.

However, it appears that this financial explosion has come to the point where it freezed. Among 25 major Chinese developers tracked by Bloomberg Intelligence, only two generated positive cash flow from operations and investment in 2014. On the other hand, their combined net debt jumped to a record 919 billion yuan ($148 billion).

That is why some of these giants have decided to apply impressive incentives in the hopes they will eventually get people to buy new flats. According to Bloomberg, Hopson Development Holdings Ltd. in May offered a free Porsche or discounts as much as 11 percent to the first 30 buyers of apartments in a complex in southern China.

How about that for a marketing venture, right? Just think about it. You move in your freshly constructed four-room apartment, and you can’t stop gazing at the gorgeous 911 you received for free. Book us for two, please!
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