SANTIAGO (Reuters) - With home sales plunging as the global financial crisis chokes domestic demand, Chilean real estate companies are offering apartments at what they say are cost prices at night -- and even picking up buyers’ air fares as an incentive.
Real estate companies seeking to sell hundreds of apartments grouped in dozens of complexes across the capital city of Santiago and the seaside resort of Vina del Mar conducted a coordinated sale at the weekend, imitating traditional late-night efforts in Latin America’s retail sector.
With discounts of about 20 percent to December’s prices and the offer of flights and a hotel stay for those who travel from Chile’s regions and agree to a purchase, the real estate firms say the steep discounting from 6 p.m. until midnight or later is proving an antidote to the global economic crisis.
“The night sale has brought the buyers back out,” said Cristian Camus, who heads up a participating apartment complex in the center of the capital.
“They realize this is a buying opportunity, at highly competitive prices, and the truth is that the sector has picked up,” Camus said as prospective buyers at one such night sale sipped on sparkling wine and snacked on cheese in the lobby. He said he had sold about 25 apartments at the 357-unit complex at an earlier sale and was now trying to sell the remaining 36.
Organizers of the weekend sale say that at their first night sale in January, they sold more than 200 apartments worth a total of around $10 million and equivalent to the prior, crisis-dented month’s business.
Like Chile’s mining, forestry and retail sectors, the construction sector has been hard hit by the global crisis. Cencosud, one of Latin America’s largest retailers, said last month that it was putting the brakes on a $500 million megamall in the capital until financial uncertainty clears.
Housing sales began to flag in 2008, and inventory in September ballooned to 32 months’ worth of sales for apartments and to 16 months for houses as supplies of new units increased.
The Chilean Chamber of Construction expects home sales in the greater Santiago area, which accounts for about 70 percent of the national total, to fall 11.2 percent to 23,570 units in 2009 from 26,560 in 2008.
“They are offering a lot more benefits than before,” said social worker Susana Riveros, 32, who was shopping for an apartment with her husband, parents and 9-month-old infant. “There are additional discounts, special offers delaying repayments ... It is very tempting to buy a new property.”
The apartments available at the latest night sale range from about $28,000 to upward of $240,000. Organizers said most offers involved mortgages, while 20 percent of sales were cash.
President Michelle Bachelet unveiled a $4 billion anti-crisis fiscal stimulus plan last month that the government hopes will fend off recession, help the economy grow between 2 percent and 3 percent this year, safeguard as well as create jobs, and encourage home purchases.
Editing by Simon Gardner and Lisa Von Ahn