Many of China’s real estate developers have devised different strategies to revive the housing market slump. This time, civil servants are the new target. 

Many notices have recently been issued to encourage civil servants to buy houses in groups for a discount. What do experts say?

As reported, several cities across China have implemented policies related to group buying of houses. Accordingly, the government encourages civil servants or employees of state-owned companies, colleges and universities, scientific research institutions, and other groups to buy houses in bulk for better deals. As of June, discounts and preferential policies were offered to boost the housing market.

The group deals are offered in Taiyuan in Shanxi Province, Guangdong’s Zhongshan, Liaoning’s Shenyang, Zhejiang’s Tonglu, Anhui’s Tongling, Yunnan’s Pu’er, Sichuan’s Bazhong, Hubei’s Huanggang and Jilin’s Changchun.

According to VOA News, group purchases in Tonglu County, Zhejiang Province, will receive a 3% discount for the one-time purchase of more than ten houses and a 5% discount for a one-time purchase of more than 20 houses.

In Huanggang, Hubei Province, any group deal with more than 20 buyers receives a discount of at least 3% of the total price.

Chen Xiao, a senior analyst at China’s Zhuge Real Estate Data Research Center, said in an interview with Chinese media that encouraging civil servants to buy houses in groups can promote the sale of commercial housing and reduce inventory pressure. In addition, these groups have purchasing power.

However, Mr. Huang, a 40-year-old Henan resident who works in the culture and creative industry, had an interview with VOA News. He said that although group buying of houses could likely play a stimulating role in the housing market, they won’t be able to address the oversupply and bubble issues.

Huang added that buying houses in groups does have a certain appeal. However, the main urban areas of most cities are now so crowded that these buyers may only buy houses in very remote places.

More importantly, these houses cannot yet be traded, which means they cannot be used for investment. Thus, civil servants appear unwilling to buy these houses.

Wang Zheren, an assistant researcher at Taiwan’s Institute for National Defense and Security Research, told VOA News that Chinese civil servants buying houses as a group may seem to benefit from a discount. But most of these inventory commercial houses are located in the “hardest hit areas” in the real estate market, where house prices stop rising but even fall. Clearly, it is not a good investment.

Another factor that reduces the willingness of civil servants to buy is the wave of unfinished buildings. 

Additionally, Chinese civil servants have recently seen a 20–30% cut in income.

These factors have deepened consumers’ concerns when putting money into the property.

According to analysts, under the dual risks of wage reductions and unfinished buildings, civil servants will continue to consider potential salary reductions and a future decline in the housing market. And that investing in these types of homes at this time can only make the situation worse.

Before this, the government also used various ways to boost housing sales.

As the South China Morning Post reported on July 5, watermelons, wheat, peaches, and garlic have recently become a form of currency to offset the cost of a new home partially. This is due to the country’s housing market being in a slump and the government’s unwillingness to reduce housing costs at will.

Take Nanjing, ​​the capital of China’s eastern Jiangsu province, as an example. Developers in Nanjing allowed buyers to use 5,000 kg (about 11000 pounds) of watermelons to offset 100,000 yuan ($14,921) of the cost of a new house. 

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