*Developer offers free BMW to shift property

A developer in the Wenzhou province in China has come up with what some would argue is a desperate sales strategy.

The first 150 buyers who put down a small deposit for a unit in Central Mansions, a cluster of towers with 868 apartments in Wenzhou, will walk off with the keys to a brand new BMW.

The deal is a sign of the desperation felt by developers in China’s once-booming property market, which has been pounded by government measures aimed at heading off a bubble.

The slowdown is a matter of international concern because Chinese construction spending drives the export markets of a large number of countries.

Although Wenzhou is one of the markets hardest hit by the measures, an article in the China Daily reported last month that the problems are widespread. Property sales volumes were down 23% in Beijing and an incredible 80% in Shanghai compared to the same holiday period in 2010.

A report this week from Barclays Capital predicts house prices will fall by as much as 30% in the current downward cycle.

Reasons to be cheerful

It is difficult to remember a more negative news climate. The Eurozone crisis and a potential Chinese property crash is making news from the US look positively jolly.

The politicians in Europe and China are under pressure from increasingly militant populations. The easiest way out is to print money. For China monetary stimulus helps to decrease real property prices through inflation and in Europe it does the same but has the added benefit of decreasing the real sovereign debt burden.

There’s never been a better time to invest in scarce resources. The people in our industry with the trust and reputation to match the best opportunities with the right buyers should prosper.

Source: Global edge

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