In Guiyang, the capital of China's southwest Guizhou province, thousands of new homes offered at discounts for group purchases had property agents rubbing their hands in glee. Sadly, their excitement was short-lived.

The price of a new home in the city's Baiyun district with landscaped gardens and housekeeping service in October was reduced by 50,000 yuan (US$7,430), but it did not seem to generate interest.

"People mostly came to view the flats," said Chen, a property agent who only gave her family name. The response was just lukewarm as there were not many serious buyers among them, she added.

There was not much interest either for another project in Wudang district in the capital, according to another property agent surnamed Wang, who sought buyers for units in the project that counts its proximity to a new metro line as a big selling point.

"Although there were many refinements in property policies, it was akin to 'squeezing toothpaste' to ease the pressure little by little," said Hu Jinghui, chief economist at the Jinghui Think Tank. "I think there should be a major, one-off fine-tuning [to spur demand]."

China's property market has gone from boom to bust in the months since the Covid-19 outbreak. Only two years ago, Beijing cracked down on scam divorces, limited property bank loans, tightened home-buying restrictions, and introduced property tax to rein in the housing bubble.

To prop up the ailing property market, authorities at all levels across the country rolled out dozens of initiatives last year to stimulate demand – from lowering mortgage rates and lifting curbs, to slightly more unusual ones. In the latest example, the city of Fuzhou in southern Fujian province last week unveiled a plan that gives as much as 30 per cent discount for home purchases by eligible employees in leading enterprises.

The shift in the policy direction came after developers suffered an unprecedented liquidity squeeze, with Beijing's "three red lines" clampdown triggering massive defaults in property bonds.

"In the long term, pre-sales are still the key for repayment" of bonds, Chris Li, head of Asia credit trading desk at BNP Paribas in Hong Kong, said in a January 30 report. "For this to happen, a combination of accommodative monetary policy, residential property purchase policy, and waning of the pandemic are needed."

Guizhou, one of China's most indebted provinces, in October became the first provincial government to advertise group buying for new homes as part of its stimulus package. The discounts ended on December 31. Authorities in Ziyang in southwestern Sichuan is the latest to promote group buying with its plan earlier this week.

While the idea of group buying is common in China's e-commerce sector, it did not take off as the Guizhou authorities had hoped for. More than 20 tier-2 and tier-3 cities, including Hangzhou and Zhongshan have also failed to stoke home sales after adopting similar marketing strategies since June.

"Local governments rely on land sale [for revenue] and if homes do not sell fast, developers will lose confidence and will not bid for land, which poses a problem for them," said Hu of Jinghui Think Tank.

This compounds problems for such governments, leaving them in a worse-off financial state, he added.