Chinese real estate developers accepting watermelons as payment: Here's why

The deep recession in China's property market has compelled real estate companies to float a bizarre marketing strategy to lure home buyers.

China's real estate developers have started accepting payments for homes in watermelons and other agricultural produce.

"Real estate developers in Chinese third- and fourth-tier cities have launched various promotional campaigns recently, including encouraging home buyers to pay part of their down payment with wheat and garlic, in a bid to attract farmers to purchase newly built homes to offload excess housing inventory," Global Times reported.

One developer in Nanjing said it would allow home buyers to pay for their homes using watermelon at a rate of 20 yuan per kilogram, as per Global Times.

The media outlet quoting a representative of the company said that the bizarre promotional event has been suspended after being ordered by the headquarters.

"We were told to delete all promotional posters on the social media platforms," said the representative, noting that they may design other types of promotional activities.

A poster for the promotional event starting from June 28 to July 15, reads the property developer would allow home buyers to make a maximum payment of 5,000 kilograms of watermelon, valued at 100,000 yuan, noting the purpose of the promotion is to support local watermelon farmers.

The property market was one of the few cherished destinations for household savings. The developers and homebuyers were also willing to take loans from the banks but these good days for China ended last year.

The household debt touched over USD 10 trillion. And around 27 per cent of bank loans in China are tied to real estate, reported a think tank, Policy Research Group (POREG).

This industry was known to be the biggest job creator in China but now it is termed as "Lehman moment", in comparison to the 2008 bankruptcy of Lehman Brothers, which was a trigger for the global financial crisis. More so, when the number of empty homes has crossed the 65 million mark (90 million according to some estimates) - enough to house the population of France, and raised the spectre of a global economy on crutches.

The housing market in China is now seen as 'a national threat' as prices rise sky-high, just like the buildings, according to Think Tank citing New York Times.

Developers borrowed money in the form of onshore and offshore bonds, trust loans, and wealth management products, in addition to bank loans. Thus, lenders span from institutions to the general people both at home and overseas.