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Chinese real estate companies in third- and fourth-tier cities have launched various promotional campaigns in recent days, including encouraging buyers to pay part of their down payment with wheat and garlic, in a bid to entice farmers to purchase new properties and offload excess inventory.
Central China Real Estate, a real estate company based in central China’s Henan Province, a major agricultural base in China, on June 20 launched a special promotion titled “Helping Farmers”, allowing home buyers in the county from Minquan of Henan to pay the deposit with wheat, calculated on the price of 2 yuan (0.29 cents) per 500 grams, according to a message on its official Wechat account. The campaign was suspended at press time.
The maximum amount for such an exchange is 160,000 yuan, while the deposit for the apartment is between 200,000 yuan and 270,000 yuan.
A seller was quoted in the media as saying the target buyers for the apartments were people from rural communities who owned farmland, the main reason for the campaign. The individual reportedly said that during the summer harvest, the market price for wheat is 1.5 yuan per 500 grams and the property developer was willing to buy at a price slightly above the market rate.
Another real estate project in Henan’s Jixian County, a major garlic production base, also launched a similar campaign in May. From May 22, buyers could pay a deposit using garlic, priced at 5 yuan for 500 grams. The maximum amount for trading garlic is 20 percent of the total transaction price, according to media reports.
As of June 6, a total of 430 million grams of garlic had been traded, involving 30 apartments, according to a post. But the campaign has also been canceled as of press time.
Industry watchers said the campaign represents the latest move by property developers to bolster homebuyers’ willingness to buy by reducing down payment capital requirements to bolster first-timers’ tight cash flow. Some said the move was innovative and took into account Henan’s position as an agricultural province and its flat real estate market.
In the first five months, commercial home sales in China totaled 4.83 trillion yuan ($719 billion), down 31.5% year on year, as residential home sales fell 34.5% , according to data from the National Bureau of Statistics.