Debt-riddled developers in China are turning to incentives like luxury cars as they rush to shed an inventory of unsold homes about seven times the size of Manhattan.

Hopson Development Holdings Ltd in May offered a free Porsche or discounts of as much as 11 percent to the first 30 buyers of apartments in a complex in southern China. Evergrande Real Estate Group Ltd is letting homebuyers cancel purchases and get all their money back any time before they move into their flats.

Such offers underscore the urgency among developers as they seize on a nascent rebound in sales and prices to generate cash and reduce record debt. Whether the recovery will gain traction is far from clear: While sales across the country jumped 32 percent in May from a year earlier, construction and property investment remain subdued.