Property Developers to Change Strategies to Meet Sales Demand

Property Developers to Change Strategies to Meet Sales Demand Property developers in china are being forced to face a much steeper price cuts, strategy changes and broader promotions for the third quarter as these developers scramble to meet the sales targets for 2014 after only getting less than 30 percent of what they have forecasted for the first five months of 2014. Furthermore these price cuts is said to help boost the sales and lower inventories and ease the oversupply of housing , but these price cuts came at the cost of profitability to many of the property developers.

These pushed some developers in giving out options and adjust their strategies by introducing basic housing wherein the demand is more stable compared to luxury apartments and turn other areas into commercial projects. More developers are renting out their properties instead of selling due to a slow market, and by renting they can earn revenues than let the property sit without turning any profit. As June is about to end China property sales is expected to pick up as it enters July due to the boosted up price cuts and a forecast of a full year sale volume that has an increase of 10 percent.

In second and third tiered cities prices cuts of 20 percent will push sales to a healthier profit margin. The revenues from property sales has dropped 8.5 percent for the first price months compared to 2013, as the growth in average home prices in China slowed down to near a one year low in April.

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