Why property developers in China accepting house payments in watermelons, wheat

Real estate firms in China have now started accepting payments for homes in watermelon, wheat, garlic and several other agricultural produce, Chinese daily The Global Times reported. Realtors in tier-3 and 4 cities are encouraging home buyers to pay part of the house payment with wheat and garlic.

As per the report, this move is a part of the ‘food-for-home’ scheme devised by the property dealers in an attempt to boost sales and to attract farmers to purchase homes. “Property developers 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 scheme’s promotion read.

Experts say that China’s economy, battered by multiple Covid-19 curbs, has shown slow post-lockdown recovery. Shanghai, the financial capital of the country, saw one of its strictest lockdowns since the beginning of the pandemic. The city of 25 million people has just emerged from a brutal two-month lockdown that took an enormous toll on residents and the economy. Economists believe that the ‘zero-Covid policy’ has left the country stuck in a cycle of disruptive shutdowns and reopenings that hint at lingering economic pain.

China is stepping up efforts to salvage the residential property market as consumer and business confidence has been battered by lockdowns, Bloomberg reported. These are said to include quicker approval of home loans, stable growth in property loans given by banks and lower mortgage costs owing to a reduction in interest rates.

In April, more than 60 municipal authorities in China eased home-buying regulations in the first quarter. China’s central bank advised financial institutions to offer flexibility and improved loan policies to individuals that are affected by Covid outbreaks.

In May, The People’s Bank of China effectively cut the minimum interest rate for first-home buyers’ new mortgages, enabling them to borrow money at an interest rate as low as 4.4 per cent, down from 4.6 per cent previously, Bloomberg reported.

Despite all the steps taken to boost the real estate sector in the country, China’s property market is still said to be in a deep recession. The trouble for property investors will only increase in yet another Covid wave is in the cards for the country.