A Chinese real estate company is taking wheat and garlic as down payment for houses
After the near-total collapse of Evergrande, a company that was once China’s biggest real estate developer, China’s real estate market has been struggling, with some of its smaller players even turning to state support to survive.
With that, it’s time for creative solutions, and Central China Real Estate may just have one.
See, instead of putting down cash for a down payment, the company is trying to entice farmers into buying homes by offsetting their down payment with purchases of their crops like wheat or garlic. Weeks ago, it said it was willing to take garlic from growers in Kaifeng city, and now it’s offering up to 160,000 yuan (about US$24,000) for wheat to put toward a down payment on a house in Shangqiu, in the Henan province known for wheat production.
And they’re not trying to skimp farmers out either – Central China is reportedly buying wheat at 4 yuan per kilo (as opposed to the record high of 3.1 yuan per kilo that the Chinese state was paying earlier this month) and garlic at 10 yuan per kilo (as opposed to the June 10 wholesale price of 6.92 yuan per kilo).
This just goes to show how far developers are willing to go to attract homebuyers who, after the Evergrande crisis and amid a slowing economy, are warier of real estate in general. And for those investors still left out there, it turns out that buying the (garlic) dip might be the best option available.