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Chinese companies working in the real estate sector announced that they are accepting the sale of their homes in the barter system for food instead of money, in an effort to attract buyers.
Over the past months, companies have published promotional advertisements that talk regarding sales deals in a way that allows citizens to buy new homes in return for paying home down payments by supplying agricultural products, including peaches, watermelons and garlic.
Despite this, some companies withdrew those exceptional offers.
And home sales in China recorded a decline for 11 months in a row, which caused major companies operating in the sector to default on their debts this week.
A real estate company in the eastern city of Wuxi said it would allow peaches to be accepted for up to regarding 189,000 Chinese yuan ($28,218) as a down payment on homes.
photo released, Getty Images
Another company in neighboring Nanjing added that it would accept the supply of 5,000 kilograms of watermelons from farmers, with a value equivalent to 100,000 yuan, which is more than the price offered in the local markets.
Despite this, companies suspended those promotions that were supposed to continue until next Friday, according to the official “Global Times” newspaper.
“We have been asked to delete all promotional posts on social media platforms,” the newspaper said, quoting a representative of one of the companies as saying, without elaborating on further details.
In May, Central China Real Estate launched a 16-day campaign to accept garlic as a down payment on the price of a home in China’s Qi Province, a major garlic-growing region.
“We help farmers with love and make it easier for them to buy homes,” the company said in a post on the Chinese WeChat platform.
Under the deal, the price of a weight of garlic, equivalent to regarding 600 grams, is set at five Chinese yuan, regarding three times its market price.
The company said it accepted 860,000 kilograms of garlic in deals to sell 30 homes.
photo released, Getty Images
Despite this, the company has since deleted an announcement of a similar sale of wheat, which was launched on WeChat last month. The company did not immediately respond to a request from the BBC for comment.
Experts said the deals are a way for companies to get around local authority rules to limit the amount of discounts they are allowed to offer.
Official figures for May show that residential property sales in China fell 41.7 percent from a year earlier, the eleventh consecutive month of decline.
China’s “Xiamo Group” said it had failed to make interest and principal payments related to a $1 billion foreign bond outstanding.
The company added, in a note to the Hong Kong Stock Exchange, that it recorded a “remarkable decline” in sales with “significant changes in the overall environment of the Chinese real estate sector since the second half of 2021, driven by the impact of Covid-19.”
This comes at a time when the giant Chinese real estate company, Evergrande, is restructuring its business following it failed to pay its debts late last year.