Farmers in China pay for homes with watermelons, peaches: Report

Accepting crops at inflated prices have allowed developers to offer steeper discounts on homes

Struggling developers in China have started taking payment for homes in watermelons, peaches and other agricultural produce, state media reported Sunday, as they attempt to lure buyers deterred by a property market slump.

China's housing market has been hit by a slowing economy and debt crisis precipitated by a government ban on builders taking deposits before construction begins on a project.

One developer in the eastern city of Nanjing said it would accept truckloads of watermelons worth up to 100,000 yuan as down payment from local farmers, state-run China News Weekly reported.

In the nearby small town of Wuxi, another developer was taking peaches as payment, the magazine said.

Homebuyers in Qi county, a major garlic-producing region in central China's Henan province, can exchange their produce at three times the market price to settle part of their down payment.

Accepting crops at inflated prices has allowed developers to offer steeper discounts on homes than permitted by local governments while tapping into an underserved market.

"On the occasion of the new garlic season, the company has made a resolute decision to benefit garlic farmers in Qi county," homebuilder Central China Management said on social media in late May.

About 30 properties had been sold since the garlic campaign was launched, it added.

Home sales in China measured by floor area have slid for 11 consecutive months and were down 31.5 per cent in May compared to the same month last year, official data shows.

Homebuilder Central China Management said on social media in late May: "On the occasion of the new garlic season, the company has made a resolute decision to benefit garlic farmers in Qi county. We are helping farmers with love, and making it easier for them to buy homes." 

The AFP report mentioned that in the nearby small town of Wuxi, another developer was taking peaches as payment, the magazine said.

Chinese developer Shimao fails to repay $1-bn bond

Chinese developer Shimao Group Holdings stated that it did not pay a $1 billion note that matured on Sunday, contributing to a record year of defaults on offshore bonds in the sector. 

The luxury builder said in a filing with the Hong Kong stock exchange that it has not made principle payments on a number of other offshore debts and has been in discussions with creditors to find “amicable resolutions.” 

According to the company, “creditors may have the right to demand repayment acceleration” if Shimao is unable to repay its debts.