Bitcoin acceptance in China has now extended into real estate with a residential developer in Zhangjiang Hi-Tech park in Shanghai finding a new way to promote sales through the acceptance of Bitcoin virtual currency.
Shanda Group, one of the large IT giants in China, through its real estate development arm, opened sales of its first real estate investment project on October 25th, 2013. 300 apartments in the soon to be built buildings ranging from 42-81sqm were available for sale and sold out in a few minutes as demand far outstripped supply.
Here's to a happy prosperous buying future with Bitcoin
As part of the promotion, Shanda accepted Bitcoins for payment. Although the exchange rate was ‘fixed’ at 1,000 Chinese Yuan (CNY) to one Bitcoin and the developer reserved the right to adjust the rate, the deal represents one of the first times that Bitcoin could be used for such a large scale 'public' purchase. The exchange rate was about 1,200 CNY : 1 Bitcoin on BTCChina that day, so the developer was obviously trying to hedge a bit in case Bitcoin fell through, but considering the rate is rapidly reaching nearly 2,000 CNY : 1 Bitcoin, it would have been a great deal for the developer – Bitcoin is one of the few investments in China that has been increasing faster than real estate in 2013.
The program was specific for the Zhangjiang Hi-Tech park as there are, as you would expect, a number of high-tech companies in the zone with younger workers would presumably be more aware of and in-touch with Bitcoin. The advertised price for the apartments was between 21,000-28,000 CNY / sqm, which is roughly what you might expect, if not a bit cheap.
The current run-up in the price of Bitcoin is an indicator of the interest in the currency, but is likely largely due to speculation. However, examples like this property development show how Bitcoin could be used for non-speculative purposes in nearly every industry. Regular bank transactions to pay for property would typically involve a stack of paperwork and likely a solid afternoon in the bank. With Bitcoin, the transaction could be completed in minutes.