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[Asia Economy Senior Reporter Jo Young-shin] Amid the sluggish recovery of the Chinese real estate market, a real estate development company in Nanning City, Guangxi Zhuang Autonomous Region, has advertised that homebuyers will receive free subway service for 10 years. This real estate advertisement phrase has sparked controversy over its authenticity and benefits on Chinese social networking services (SNS) after being shared on Weibo (China's version of Twitter).

Photo by Bonghwa Mang capture

According to Chinese media including Hongseong Newspaper on the 18th, Guangxi Nanning Railway Real Estate Group recently advertised that customers who purchase homes will receive free subway service for 10 years. Hongseong Newspaper explained that this real estate company is controlled by Nanning Railway Transportation Co., Ltd., which is managed by the Nanning State-owned Assets Supervision and Administration Commission. In other words, it is not a scam company.

Hongseong Newspaper reported that after verifying the authenticity, the advertisement promising free subway service for 10 years to homebuyers (including up to three immediate family members) is accurate. The newspaper calculated that if three people use the subway for 10 years, the maximum fare would be 75,000 yuan (approximately 14 million KRW). Assuming a round-trip subway fare of 7 yuan per day, the monthly fare (30 days) would be 210 yuan. In one year, it would be about 2,500 yuan, and over 10 years, the fare would total 25,000 yuan. For three people including immediate family members, the total fare amounts to 75,000 yuan.

Hongseong Newspaper stated that the price of the homes (72㎡ to 90㎡) being sold by Guangxi Nanning Railway Real Estate Group ranges from 700,000 to 880,000 yuan. The 75,000 yuan value of free subway use for three people over 10 years is equivalent to an 8 to 11% discount on the home price. This implies that receiving about a 10% discount on the home price would be a wiser option than the 10-year free subway service.

Jang Da-wei, Chief Analyst at Jungwon Real Estate, said, "The 10-year free subway fare service is a marketing strategy to attract homebuyers' attention," adding, "Getting a cash discount on the home price is more advantageous for homebuyers."

Yan Weijin, a researcher at China E-Housing Research Institute, said, "Chinese real estate companies are currently under pressure to dispose of inventory," and "various marketing techniques that can mislead consumers will continue to emerge."

The media pointed out that other subsidiaries under Nanning Railway Real Estate Group are also conducting various marketing campaigns, such as issuing annual subway cards in addition to the 10-year free subway fare service.

Hongseong Newspaper cited data from the National Bureau of Statistics, reporting that as of the end of September, the price of secondhand homes in Nanning City fell by 5.5% compared to the previous year.

It also quoted experts estimating that the current inventory of new homes in the Nanning area reaches 7.83 million square meters, and it will take at least 2 years and 3 months to sell off all the inventory.

The media reported that the Nanning City Housing and Urban-Rural Development Bureau recently introduced 16 real estate stimulus policies, including lowering the minimum down payment to 30% when purchasing a home, reducing interest rates on loans for second-home buyers, and increasing loan limits.

Meanwhile, the People's Bank of China, the country's central bank, extended the repayment period for bank loans to real estate project financing companies by one year and also extended bond repayment periods on the 11th. It is also guiding extensions of loan repayment periods for real estate borrowers, actively working to stimulate the real estate market. Some in China expect the People's Bank to lower the 5-year Loan Prime Rate (LPR), which affects the real estate market, on the 20th or 21st, but whether the real estate market will revive remains uncertain.

This content was produced with the assistance of AI translation services.