Chinese developers who accept crops as real-estate down-payments are circumventing rules against discounting, a state-run newspaper said on Thursday.
The food-for-homes trade has expanded from wheat and garlic to watermelons and peaches, as developers in some small cities reduce the cash amount that buyers need upfront and effectively make properties cheaper.
“Some real estate companies have rolled out unique ways to help boost sales, with fancy promotions like swapping melons and fruit for homes raising suspicion over whether they are trying to bypass curbs on price cuts,” The Paper reported.
In June, one Chinese developer said buyers can use watermelons to offset as much as 100,000 yuan ($14,935) for an apartment in Nanjing in eastern Jiangsu province, The Paper reported. The promotion is currently on hold, it said, citing a salesperson.
And in Wuxi, also in Jiangsu, a developer this week said buyers can use peaches to offset as much as 188,888 yuan in payment.
More than 22 cities have set limits to price cuts since the second half of 2021 to prevent an anticipated slump in the property market, making it difficult for Chinese developers to further reduce prices to boost sales, The Paper said.
Property sales by floor area fell for the 10th consecutive month in May, down 31.77% from the same month a year earlier, despite a slew of easing measures taken by cities to boost sentiment hit by Covid-19 containment measures.
Among 100 major Chinese developers, most achieved less than 30% of their sales targets as at the end of May, The Paper reported, citing data from China Real Estate Information Corporation.
- Reuters, with additional editing by George Russell
This report was updated on July 13.