Chinese Developer Offers Discounts for Apartments Over Chinese New Year

(Bloomberg) -- China Evergrande Group must have a feeling this year’s going to be tough.

The Chinese property developer and electric-car wannabe kicked off a nationwide sales promotion just hours after forecasting the slowest annual home-sales growth in years.

From now until Feb. 20 -- a period that incorporates Chinese New Year -- buyers can get a 13% discount on Evergrande apartments around the country. Other sweeteners include a 5% discount for anyone referred by a company employee and a 7% discount for purchasers making lump-sum payments.

While Evergrande routinely offers discounts around the week-long Lunar New Year holiday -- a popular time to apartment shop in China -- this year’s promotion has come earlier and lasts longer.

On Thursday, Evergrande unveiled its weakest annual sales growth target in eight years. The home builder is targeting 650 billion yuan ($93.3 billion) in contracted sales for 2020, 8% higher than 2019. That’s the most-modest rise since 2012, Bloomberg calculations based on company data show. The developer sells mainly mid-range units across both large and small cities.

Against the backdrop of a lackluster market, home buyers can probably expect even deeper discounts.

Home-price growth in China slowed for a sixth straight month in November. The most evident decline was in second-tier regional economic hubs, even as some of those cities made it easier for people to obtain highly sought-after residency permits, which have the potential to spur sales.

Evergrande’s Hong Kong-traded shares slipped 2% Friday, the worst among major Chinese developers. The stock was down 7.9% in 2019.

To contact Bloomberg News staff for this story: Emma Dong in Shanghai at edong10@bloomberg.net

To contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net, Charlie Zhu

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With assistance from Bloomberg