Amidst the challenges of a softening housing market, a Chinese developer, Central China, has adopted a novel approach to attract buyers by offering them the option to use wheat and garlic as down payments for their homes. The advertisement campaign, bearing titles like “swap wheat for property,” is gaining attention and sparking discussions within China’s real estate sector.
The promotion allows potential buyers to leverage their agricultural produce, specifically wheat, and garlic, as a form of down payment. One advertisement mentions that buyers can use wheat, valued at 2 yuan per catty (a Chinese unit equivalent to around 500 grams), to offset as much as 160,000 yuan (approximately $23,900) of the down payment for properties in one of Central China’s developments. The initiative primarily targets local farmers in the Henan province and is set to run from June 21 to July 10.
A sales agent representing Central China clarified that this unique campaign is aimed at local farmers in the region. The properties available in this promotion are priced between 600,000 and 900,000 yuan. The development is managed by Central China Management Corporation Limited (9982. HK), a project management unit within the group.
This unconventional approach comes as the real estate unit of the group, Central China Real Estate (0832. HK), reported a substantial 71.3% decrease in May sales compared to the previous year, with a 48.6% drop in sales for the first five months of the year.
This initiative follows a previous campaign by Central China where buyers could use garlic as a down payment, priced at 5 yuan per catty. The garlic promotion garnered significant interest, attracting 852 visits and leading to 30 transactions involving 860,000 patties of garlic over 16 days.
Home builders across China have been striving to boost sales, given the slump in transactions during the first five months of the year, attributed to the stringent COVID-19 restrictions and concerns regarding the possibility of a deeper property market correction. The Chinese government’s growth target of 5.5% for 2022 is closely tied to the real estate sector, which accounts for a significant portion of the nation’s economy.
To reinvigorate the housing market, cities in China have introduced numerous housing easing measures this year, such as reduced down payments, subsidies, and improved terms for homes with multiple children. Some developers have resorted to creative marketing strategies, offering promotions like free parking lots or post-purchase renovation services to attract potential buyers.
While the efforts have resulted in an uptick in consumer sentiment, industry experts remain cautious about prematurely labeling this as a turning point, given the many economic uncertainties faced by China.
The unusual campaign of using agricultural produce as a down payment in the real estate market underscores the creative measures developers are willing to explore to counter the headwinds in the industry.
