As China’s real estate developers are struggling with a shortage of cashflow, more and more companies have been giving people houses, many of which are still under construction, as a way of paying their contractors. Normally these houses are sold at a big discount and the recipients can then sell them to recover their cash.
Giving out houses has been happening in many cities. In Guangzhou city, a major economic hub in Southern China, over ten construction projects gave out houses as a way of making their payments.
Also, the housing prices in some cities have started falling. If this trend continues, it could lead to a collapse of the real estate market. Twenty-one cities have issued orders to prevent prices from dropping too fast.
Source: China Business Network, November 13, 2021