(Yicai Global) June 9 -- A housing developer in the eastern Chinese city of Hangzhou is sweetening sales with the offer of a gift of as much as 1 kilogram of gold on selected properties, at a time when prices of the yellow metal are at near-record highs.

Buyers will receive the incentive on homes in three of the developer’s Huafa Huitianfu project's buildings located in Hangzhou's outer suburban Lin’an district, a salesperson told Yicai Global yesterday. An 89-square-meter flat comes with 850 grams of gold, while a 100 sqm apartment comes with 1 kg of gold, the person said.

Gold currently retails for CNY450,000 (USD63,249) per kilogram in China, while the listed price of a 100 sqm unit at the Huafa Huitianfu project is CNY2.5 million (USD351,385). So buyers are getting an 18 percent discount after the gold is thrown in.

The developer is offering the gold to indirectly lower home prices as it cannot do it directly because of government controls, according to an industry insider. Builders also use other ways to get around restrictions, including special offers on selected apartments, free decoration, property management, and parking spaces, insiders told Yicai Global.

Hangzhou’s housing market was one of the hottest in China early this year, but has since cooled down.

Some 819,000 sqm of homes were sold in Hangzhou last month, down 30 percent from April, but the average transaction price rose 2.9 percent, data from the China Index Academy showed. New houses in main districts are still in demand, while the number of buyers pulling out of deals in the city's outskirts is growing.

Editors: Tang Shihua, Martin Kadiev