Got garlic, or watermelons or peaches, for that matter? It could help you buy a home in China.
Some Chinese developers, stymied by local restrictions that won’t let them reduce prices, are finding creative ways to offset the high cost of a new home, the South China Morning Post reported. One example: Developer Seazen Holdings in June let buyers sell the company 5,000 kilograms of watermelons in order to cut 100,000 yuan ($14,921) from the asking price of a new 1.5 million to 2.3 million yuan flat.
“Local governments do not allow price cuts at will, so developers can only sneakily find ways to cut prices,” Zhang Dawei, chief analyst at Centaline Property Agency, told the outlet.
Central China Real Estate, in Henan, held a promotion in May to accept garlic at 10 yuan per kilo to offset up to 160,000 yuan of the asking price. The deal led to 30 units being sold and about 430,000 kilos of garlic being traded from May 22 to June 6.
In Wuxi, a city in Jiangsu province near Shanghai, homebuyers were able to trade peaches in exchange for up to 188,888 yuan off the cost of a unit. The number eight is considered a lucky number in China.
Local authorities are enforcing measures that prevent developers from reducing the prices of homes too much in at least 22 mainland cities.
“A drastic price cut by developers will disturb the market,” Yan Yuejin, research director at Shanghai-based E-house China Research and Development Institute, told the outlet. “Local governments have more requirements to limit the housing price-cut to stabilize the society.”
While the creative promotions are helping developers at the moment, it’s unlikely the government will allow them to go on for much longer or relax its restrictions on price reductions.
Some developers are using equally creative, but more traditional promotions to sell properties. A developer in Lianyungang, also in Jiangsu, offered 100 kilos of pork — worth about 5,400 yuan — to homebuyers as a bonus.
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[SCMP] — Victoria Pruitt