Desperate Chinese property developer ready to 'swop wheat for house'

HONG KONG • A desperate developer in China's softening property market is coming up with a novel promotion to attract buyers, recently offering to take wheat and garlic as down payments.

One advertisement of Henan-based developer Central China that had "swop wheat for house" in the title says buyers can use the crop, priced at two yuan per catty (roughly 500g), to offset as much as 160,000 yuan (S$33,000) of down payment for a unit in one of its developments.

A central China sales agent who answered the phone number on the advertisement said the promotion, aimed mainly at farmers in the region, started on Monday and will end on July 10. The development in Henan offers houses for around 600,000 to 900,000 yuan, said the agent, who declined to give her name.

The project is run by Central China Management, a project management unit of the group. The company did not respond to a Reuters request for comment.

The real estate unit of the group, Central China Real Estate, recorded a 71.3 per cent plunge in May sales from a year ago, while sales in the first five months dropped 48.6 per cent.

Late last month, another central China advertisement said buyers of houses in another development could make down payments in garlic at five yuan per catty.

The garlic promotion attracted 852 visits and 30 transactions involving 860,000 catties of garlic during the 16 days it was available, the advertisement said.

The wholesale market price for both garlic and wheat is 1.5 yuan per 500g.

Property developers in China are scrambling to boost sales after a nosedive in transactions in the January to May period, as the country's strict Covid-19 curbs combined with worries about a deeper property correction cloud Beijing's 2022 economic growth target of 5.5 per cent.

More common promotions by developers include free parking or renovations after purchase.

Cities across China have introduced hundreds of property easing measures this year to revive a sector that accounts for a quarter of the world's second-largest economy's overall output.

Such steps include smaller down payments, subsidies and better terms for households with more than one child.

Property agents said buyer sentiment is starting to improve but it is too early to say it is a turning point because of the many economic uncertainties that the country is facing.

"Some developments are selling quite well. Those are the ones offering price cuts or promotions," said Mr Andy Lee, chief executive at realtor Centaline China.


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A version of this article appeared in the print edition of The Straits Times on June 24, 2022, with the headline Desperate Chinese property developer ready to 'swop wheat for house'. Subscribe