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Chinese property developers accept farm produce for homes

Several Chinese real estate developers have said in recent months that they would accept groceries as payment for homes to lure buyers.

The companies made offers to give people products – including peaches, watermelons and garlic – as down payments for new homes.

However, some of these unusual offers have reportedly been pulled.

Home sales in China have declined for 11 straight months, while a major developer defaulted on its debt this week.

Last week, a real estate company in the eastern city of Wuxi said it would allow peaches to be used to match up to 188,888 Chinese yuan ($28,218; £23,289) in down payments on houses.

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Another developer in nearby Nanjing said it would accept up to 5,000kg of watermelons from farmers. She valued the products at 100,000 Chinese yuan – multiple of what they would cost in local markets.

However, the action, which was due to run until next Friday, has been suspended, state-run newspaper Global Times reported.

“We were told to delete all advertising posters on the social media platforms,” ​​the paper quoted a company representative as saying without giving any further details.

In May, real estate company Central China Management ran a 16-day campaign accepting garlic as a deposit for homes in China’s Qi County, a key garlic-growing region.

“We help farmers with love and make it easier for them to buy houses,” the company said in a WeChat post.

Under the deal, a catty of garlic, equivalent to about 600g, was valued at five Chinese yuan, about three times the market price.

The company said it accepted 860,000 catties of garlic at stores involving 30 households.

However, it has since removed an ad for a similar wheat deal that launched on WeChat last month. The company did not immediately respond to a BBC request for comment.

Experts have said the deals are a way for developers to circumvent local authority rules that limit the amount of discounts they can offer.

Official figures for May show that residential home sales in China fell 41.7% year-on-year, the 11th consecutive month of declines.

On Sunday, major Chinese developer Shimao Group said it missed interest and principal payments on $1bn (£825m) of offshore bonds that were due on the same day.

In a filing with the Hong Kong Stock Exchange, the company said it was experiencing a “notable decline in sales” with “significant changes in the macro environment of China’s real estate sector since the second half of 2021 and the impact of Covid-19.”

Meanwhile, embattled Chinese property giant Evergrande is in the process of restructuring its business after defaulting on its debt late last year.

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