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Property Developers In China Accepting Farm Produce As Payments For Homes

Property Developers In China Accepting Farm Produce As Payments For Homes
In recent months, several Chinese property developers have stated that they will take food as payment for properties in order to entice consumers. Companies offered arrangements in which customers could use products, such as peaches, watermelons, and garlic, as down payments on new homes.
Some of these strange offers, however, have allegedly been withdrawn.
Home sales in China have decreased for 11 months in a row, and a prominent developer has defaulted on its payments this week. A property developer in the eastern city of Wuxi said last week that peaches could be used to offset up to 188,888 Chinese yuan ($28,218) in down payments for residences.
Another developer in the nearby city of Nanjing stated that it would accept up to 5,000kg of watermelon from growers. The produce was evaluated at 100,000 Chinese yuan, which is multiple times what it would cost in local marketplaces.
However, the campaign, which was supposed to continue until next Friday, has been cancelled, according to the state-owned Global Times newspaper.
"We were told to delete all promotional posters on the social media platforms," the paper quoted a representative of the company as saying, without giving further details.
Central China Management sponsored a 16-day campaign in May, accepting garlic as a down payment for homes in China's Qi county, a significant garlic-producing region.
"We are helping farmers with love, and making it easier for them to buy homes," the firm said in a WeChat post.
One catty of garlic, which is about 600g, was appraised at five Chinese yuan, which is roughly three times its market price.
The firm stated that it has accepted 860,000 catties of garlic in 30 different transactions.
However, it has now withdrawn an advertisement for a similar wheat-based bargain that was launched on WeChat last month. The corporation made no remark on the matter.
According to experts, the deals are a means for developers to get around local government laws that limit the size of discounts they may provide.
Official data for May reveal that residential property sales in China decreased 41.7 per cent year on year, marking the 11th straight month of decreases.
Shimao Group, a big Chinese developer, announced on Sunday that it had missed interest and principal payments on $1 billion in offshore notes due the same day.
The business said in a filing to the Hong Kong Stock Exchange that it has observed a "noticeable reduction" in sales due to "major changes to the macro climate of the property sector in China since the second half of 2021 and the impact of Covid-19."
Meanwhile, Evergrande, the troubled Chinese real estate firm, is restructuring its operations after defaulting on its obligations late last year.

Christopher J. Mitchell

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