Desperate Chinese Property Developers Resort to Bizarre Marketing Tactics

China’s real-estate crisis has dragged down the economy, caused massive layoffs and pushed multibillion-dollar companies to the point of collapse.

Economists think it is about to get worse.

Sales of newly built homes in China fell 6% last year, returning to a level not seen since 2016, according to China’s statistics bureau. Secondhand home prices in its four wealthiest cities—Beijing, Shanghai, Guangzhou and Shenzhen—declined by between 11% and 14% in December from the year before, according to the broker Centaline Property.

Developers are starting fewer projects. Homeowners are paying back their mortgages early and borrowing less. Once-thriving property companies are stuck in protracted negotiations with foreign investors, following defaults on about $125 billion of overseas bonds between 2020 and late 2023, according to figures from S&P Global Ratings.

Chinese developers and local governments are so desperate to attract home buyers that some have resorted to bizarre marketing strategies.

A property company in Tianjin ran a video advertisement featuring the slogan “buy a house, get a wife for free.” It was a play on words, using the same Chinese characters as the phrase “buy a house, and give it to your wife”—but presented in a sentence structure typically used to offer freebies for home buyers. In September, the company was fined $4,184 for the ad.

A residential compound in eastern China’s Zhejiang province promised last year to give home buyers a 10-gram gold bar.

Earlier this month, Sheng Songcheng, former head of the statistics department at the People’s Bank of China, told a local conference that the housing downturn would last another two years. He thinks new-home sales will fall more than 5% in both 2024 and 2025.

Wall Street economists are also ringing alarm bells about how long the real-estate slump will last.

“Not too many people are buying, can buy or want to buy,” said Raymond Yeung, chief China economist at ANZ. He said there had been a fundamental shift in the way Chinese people view the property sector, with housing no longer seen as a safe investment.

China’s real-estate sector and related industries once accounted for around a quarter of gross domestic product and the sector’s slump has been a significant drag on the world’s second-largest economy. That has increased calls for Beijing to do more to prop up the sector, but so far Chinese officials have stuck to piecemeal policies rather than introducing a landmark stimulus package.

A number of economists are making comparisons to Japan, which spent decades trying to rebound from a crash in real-estate and stock prices. China’s stock market is in a years-long slump.

China’s central bank can help make the situation less painful, but it will need to be aggressive, said Li-gang Liu, head of Asia Pacific economic analysis at Citi Global Wealth Investments. The central bank still has policy room and could take one big step to make a significant impact, he said.

Liu Yuan, head of property research at Centaline, said that without the government’s help, new-home prices will need to drop by another 50% from current levels before they reach a bottom. This is based on the assumption that the tipping point will only come when it is cheaper to buy than to rent houses, Liu said.

China’s real-estate downturn has claimed dozens of victims. More than 50 developers—mostly privately owned—have defaulted on their debt. Developers still have millions of unfinished homes that were sold but not delivered. Chinese authorities have set aside billions of dollars to help builders complete apartments but the logjam is growing.

The crisis has drained the coffers of some Chinese local governments, which previously relied on land sales as a main source of income. Economists estimate they have hidden debt worth anything from $400 billion to more than $800 billion. To quiet talk of potential defaults, the central government has set up debt-swap programs to help some of them refinance.

Some economists are optimistic. In the first half of this year, buyers of secondhand homes will gradually return to the new-home market and prop up the sector, said Helen Qiao, chief China economist at Bank of America. “Things will slowly get better from here,” Qiao said.

But most are still expecting more pain, and investors are bearish. A benchmark of Hong Kong-listed property stocks had fallen for four years in a row before the start of this year. Since Jan. 1, it is down another 15%.

Sydney is well and truly on the world map when it comes to luxury residential property, rivalling—and even beating—the likes of Tokyo and Dubai in terms of price per square metre.

The harbour capital has also proven itself to be a powerhouse for luxury residential rental growth. Knight Frank’s Prime Global Rental Index Q4 2024 showed prime rents across Sydney grew 4.7 per cent over 2024, the fifth-highest growth globally.

This has pushed several of Sydney’s top suburbs over the $2,000 per week median rent mark for a house, with surrounding areas fast approaching the milestone.

We’ve wrapped up the most expensive suburbs to live in across Sydney, with data sourced from property data analytics firm CoreLogic.

1. Vaucluse: Median purchase: $8.69m; Median rent: $2,198

Vaucluse has consistently ranked as Sydney’s most expensive suburb for rental properties over the past few years, even with annual rents contracting by over 14 per cent. What sets it apart is its unique geography—it’s the only suburb in the Eastern Suburbs that stretches from the harbour to the ocean. Homes in Vaucluse top the price charts because most either boast Sydney Harbour views or enjoy uninterrupted outlooks over the Pacific Ocean.

The Neighbourhood

While most Eastern Suburbs have one main beach, Vaucluse is dotted with several secluded spots, such as Parsley Bay, Milk Beach, and the recently reopened Shark Beach, which had been closed for several years due to retaining wall repairs.

2. Dover Heights: Median purchase: $6.38m; Median rent: $2,024

Vaucluse’s immediate southern neighbour, Dover Heights, is the only other suburb in Sydney with a median house rental over $2,000. Dover Heights hugs the cliffs and is well known as one of the most tightly held house markets in the Eastern Suburbs. The homes are perched on the cliffside, and the majority of houses in the area have at least four bedrooms, pushing up prices.

The Neighbourhood

While there are no beaches to speak of, its elevated position provides some of the highest views of Sydney Harbour. It is also home to the Federation Cliff Walk, a five-kilometre clifftop walk with postcard views of the Pacific Ocean from Dover Heights to Watsons Bay.

3. Bronte: Median purchase: $5.64m, Median rent: $1,963

Bronte takes out the title of the most expensive of the ‘typical’ Eastern Suburbs beachside suburbs. Just 30 per cent of homes in Bronte are separate houses, with nearly half being apartments. Houses in the rental pool are typically original homes dating back to the 1960s that have been renovated over the last decade or so.

The Neighbourhood
Bronte has long been a favourite due to its more relaxed beachside lifestyle compared to the busier Bondi, although Bronte is no longer a ‘hidden gem’ anymore. It offers numerous lifestyle perks, from a small high street lined with shops and cafés to several eateries located by the beach, which also features one of the best natural ocean pools in the Eastern Suburbs.

4. North Bondi: Median purchase: $4.81m; Median rent: $1,932

North Bondi has become a hotbed of new homes, with frequent sales of either original houses or older apartment complexes being bought to be demolished and replaced by brand-new contemporary builds. There’s a mix of original cottages and new homes in the rental pool, the latter fetching over $7,000 a week.

The Neighbourhood
North Bondi is situated in a small pocket, just south of Dover Heights and north of Bondi Beach. Starting at the Ben Buckler Peninsula, near where Campbell Parade transitions into Military Road, North Bondi is one of the most secluded areas on the coastline, with Hastings Parade, Brighton Boulevard, and Ramsgate Avenue all offering a southward view over the sand.

5. Balgowlah Heights: Median purchase: $4.13m; Median rent: $1,930

Balgowlah Heights is the most expensive suburb to rent a house in the Northern Beaches. Land sizes tend to be much larger, and you get more for your money in the area compared to the East.

The Neighbourhood
Balgowlah Heights is the harbourside southern neighbour of Balgowlah. The Sydney Harbour National Park occupies half of the leafy suburb, part of the Manly to Spit Bridge Walk, and is home to Tania Park, with a children’s playground and sporting facilities overlooking Manly Cove. Nestled on the northern shores of Sydney Harbour, it offers a serene and leafy environment.

6. Bellevue Hill: Median purchase: $10.63m; Median rent: $1,917

Bellevue Hill stands as one of Sydney’s most prestigious suburbs and has some of the largest houses by median land size.

Given the large gap between median purchase price and median rental price, it is no wonder renters want to live among $10m homes and pay under $2,000 a week, when a $10m purchase means $2m deposit, over $500k in stamp duty, and roughly $12,000 a week in repayments.

Most mansions will never make it to public rental sites and are often snapped up by Hollywood stars, musicians, or even royalty when they visit Australia.

The Neighbourhood
One of the biggest drawcards for those living in Bellevue Hill is the proximity to two of the country’s top schools. While there are no catchment areas for private schools, Cranbrook School and Scots College will always draw affluent families to the suburb. Scots fees start at around $30,000 per annum from Year One and reach nearly $50,000 by Year 12.

Sydney’s Cheapest Suburb: Tregear; Median purchase: $782,000; Median rent: $544

The cheapest suburb to rent in Sydney is Tregear, located on the outskirts of Mt Druitt, approximately 50 km west of the CBD. The median house rental is $544, which is four times cheaper than renting a house in Vaucluse. The median house price in Tregear is $782,000, around 12 times less than Vaucluse.

Sydney’s Best Suburb: Point Piper

If money were no object, it’s hard to look past Sydney’s most affluent suburb as the top pick for the best place to live in the city, in my opinion.

It doesn’t even have an actual median house price, simply because so few properties change hands. Last year, just five houses sold, ranging from $8 million to $51.5 million. Homes on the best streets offer gun-barrel views of the Harbour Bridge and the Opera House, while the cosmopolitan Double Bay next door provides all the lifestyle conveniences.