Now the real estate market is embracing a warm spring, additional sales of 300 to 500 million RMB is not too much to ask. Data released by Evergrande yesterday show that Evergrande’s 22 projects in 12 domestic cities achieved remarkable performance during the Labor’s Day Holiday with sales totaling 3 billion RMB, a noticeable rebound from the sluggish performance.

“Despite uneven performance, the Labor’s Day Holiday can still be seen as the first peak selling season since the market recovery. Evergrande’s projects sold a total of 3 billion RMB during the Labor’s Day Holiday.” Evergrande’s Sales Director told our journalist yesterday. The figure reflects the sales performance of the 22 Evergrande projects in 12 cities during the most recent sales cycle. This sales cycle starts from mid April, the first half a month was spent on accumulating prospective house-buyers, and during the Labor’s Day Holiday 22 projects were launched onto the market simultaneously for contract-signing.

It is reported that Evergrande was not the only developer to carry out promotion during the Labor’s Day Holiday. According to a report by Guandian Real Estate Magazine, R&F Properties achieved sales of 500 million RMB during the holiday, other developers also saw substantial increase in their sales performance during the holiday.

“Now we still maintain our “meager profit” strategy to stimulate buying and ensure receipt of sales payments.” an employee of  Evergrande told our journalist. It is reported that during the nationwide selling during the holiday, Evergrande still adhered to the “cost price” selling mode. According to the quotation table obtained by our journalist, prices of Evergrande’s 22 projects are generally lower than prices of the peripheral projects. All 22 projects were sold at cost price with an additional 15% to 12% discount on the selling day.

“Inelastic demand in the domestic market has always been there. Price is the real balancing point of the game between the buyers and the sellers. Both the buyers and the sellers understand this. The key is whether developers have the courage to adopt “meager profit” strategy.” Evergrande’s Sales Director said. It is a well-known fact that since last year when the transaction volume in the domestic market began to slip, all developers have been faced with enormous cash pressure. As most developers were sitting on the fence, some developers like Vanke and Evergrande preemptively adopted the “meager profit” strategy in an attempt to ensure receipt of sales payments.

According to an employee of Evergrande, since last September, Evergrande’s Board Chairman Xu Jiayin has established the cost price selling strategy known as “offering bottom price before competitors act”. Thanks to this wise policy, Evergrande became one of the few non-listed real estate companies to realize over 10 billion RMB in sales in 2008 despite a sluggish real estate market.

But Evergrande’s Sales Director also stressed that although Evergrande still maintains the accelerated selling strategy, it will not change its “completed quality house selling strategy” it adopted during the early stage. It is reported that “completed quality house selling strategy” means Evergrande’s projects are sold with completed interior decoration that meets the International 9A Standards equipped with real garden view “What touches consumers’ hearts is not just price, but also quality.” In today’s market environment, high performance/ratio is another important tool for developers to expand market share. one salesperson of Evergrande said.

Reported by: Sun Wen, Securities Times