Desperate Chinese property developer willing to ‘trade wheat for a house’

Screenshot of an ad from Central China Real Estate offering buyers to use garlic crops to pay their down payment on a property

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HONG KONG, June 21 (Reuters) – (This June 21 story corrects to clarify that advertisements were from developer Central China, not Central China Real Estate and adds sales figures from Central China Real Estate)

A desperate developer in China’s softening property market is offering a new promotion to entice buyers, recently offering to take wheat and garlic as down payments.

An ad from Henan-based developer Central China, which had “exchange wheat for house” in the headline, says shoppers can use the crop, priced at 2 yuan per catty, a Chinese unit of equal mass at around 500 grams, to compensate for up to 160,000 yuan ($23,900.22) down payment in one of its developments.

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A central China sales agent who answered the phone number on the ad said the promotion, aimed primarily at farmers in the region, started on Monday and will end on July 10. The development in central Henan province offers homes for around 600,000 to 900,000 yuan, said the agent who declined to be named.

The project is managed by Central China Management Company Limited (9982.HK), a project management unit of the group.

Central China Management Company did not immediately respond to a Reuters request for comment.

The group’s real estate unit, Central China Real Estate (0832.HK), saw a 71.3% drop in sales in May from a year ago, while sales in the first five months fell by 48.6%.

Late last month, another advertisement from Central China said home buyers in another housing estate could make garlic down payments at 5 yuan per catty.

The garlic promotion attracted 852 visits and 30 transactions involving 860,000 catties of garlic in the 16 days it was available, according to the ad.

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

Property developers scramble to boost sales after January-May transactions slump as China’s tough COVID-19 restrictions combined with worries about a deeper housing correction cloud the focus Beijing’s 5.5% economic growth for 2022. Read more

The most common promotions from developers include free parking or renovations after purchase.

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

These measures include smaller installments, subsidies and better conditions for households with more than one child.

Real estate agents said buyer sentiment was starting to improve, but it was too early to call a turning point due to the many economic uncertainties facing China.

“Some developments are selling quite well. These are the ones that offer price reductions or promotions,” said Andy Lee, managing director of real estate agent Centaline China.

($1 = 6.6945 yuan)

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Reporting by Clare Jim; Editing by Marius Zaharia and Christian Schmollinger

Our standards: The Thomson Reuters Trust Principles.

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