(Yicai) Aug. 25 -- To attract potential buyers, Manjinghua Investment Group has become the first real estate developer in the southern Chinese city of Shenzhen to offer a price protection policy on a residential project it will start pre-selling in the middle of next month.

Early buyers will be entitled to full compensation if prices fall over subsequent unit sales, Manjinghua announced yesterday. More than 700 homes will be available in the initial phase of the project in the city’s Guangming district, Yicai learned.

“If sales are poor after the first phase begins, the situation will be difficult afterward,” a project salesperson said yesterday. “So, this phase’s prices will be the lowest, and we’ve the strength to guarantee prices for customers.”

Manjinghua will limit prices in the initial phase to between CNY45,000 and CNY46,000 (USD6,170 and USD6,300) per square meter, or about 6 percent to 8 percent lower than the benchmark price it set and filed with the local government, the person pointed out.

New apartments in Guangming's central area have sold well after being priced at about CNY50,000 per sqm, according to the salesperson.

Over the past three years, real estate projects in the area have sold out on the first day, even when priced at as much as CNY53,000 per sqm, Yicai found. But the market environment has changed, with a project launched in March and priced at an average CNY50,000 per sqm only half sold.

Last month, many projects in Shenzhen opted for discounts to boost sales, according to statistics from the Leyoujia Research Center. That drove new apartment sales, with contract signings jumping to a 12-month year high of 3,156, but still below the what the 5,000 that the local industry considers the boom-bust level.

Editors: Tang Shihua, Martin Kadiev