Chinese homebuilders skirt discount limits with ‘fancy’ promotions -report

BEIJING (Reuters) – Chinese developers desperate to offload unsold homes are resorting to “fancy” ways to lower prices, seemingly circumventing rules against excessive discounting, a government-backed newspaper reported on Thursday.

Developers in some small cities have offered to accept food including wheat, garlic, watermelons and peaches as down-payment substitutes, reducing the amount of cash buyers need upfront and effectively making properties cheaper.

“Some real estate companies have rolled out unique ways to help boost sales, with fancy promotions like swapping melons and fruit for homes raising suspicion over whether they are trying to bypass curbs on price cuts,” digital news outlet The Paper reported.

This week, one developer said buyers can use watermelons to offset as much as 100,000 yuan ($14,935) for an apartment in Nanjing in eastern Jiangsu province, The Paper reported. The promotion is currently on hold, it said, citing a salesperson.

In Wuxi, also in Jiangsu, a developer this week said buyers can use peaches to offset as much as 188,888 yuan in payment.

More than 22 cities have set limits to price cuts since the second half of 2021 to prevent an anticipated slump in the property market, making it difficult for real estate firms to further reduce prices to boost sales, said The Paper.

Property sales by floor area fell for the 10th consecutive month in May, down 31.77% from the same month a year earlier, despite a slew of easing measures taken by cities to boost sentiment hit by COVID-19 containment measures.

Among 100 major real estate firms, most achieved less than 30% of their sales targets as at the end of May, The Paper reported, citing data from China Real Estate Information Corp.

($1 = 6.6956 Chinese yuan renminbi)

(Reporting by Liangping Gao and Ryan Woo; Editing by Christopher Cushing)