This is how bad it is for Chinese property developers now:
As China’s property slump persists, one developer is trying to entice farmers to buy homes by accepting their crops as payment.
Central China Real Estate Ltd. is offering to pay farmers as much as 160,000 yuan ($24,000) for their wheat to offset down payments for homes in its River Mansion residential project in Shangqiu, a city in Henan province, according to a Monday marketing post. Weeks ago, it offered to accept garlic from growers looking to buy homes in another project in Kaifeng city.
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Given a downpayment is a form of regulatory capital, one can only wonder at a banking system that will rehypothecate perishable foodstuffs to build apartments. That is surely some new low in maturity mismatch.
Still, there has been a bounce of sorts in property sales:
I say “of sorts” because a large portion of the bounce is the timing of Dragonboat Festival. Even so, there is some underlying improvement.
There needs to be if China is to have any kind of recovery:
They are trying:
But with the three red lines still in play, I maintain that counterparty risk will still hold back demand, not to mention COVID, so I expect the bounce to be muted.
Consumption will also struggle as COVID lurks:
And the trade shock is coming too:
There is infrastructure but it is running out of partners:
So far, the Chinese unrecovery continues.