Originally published 2022-07-04.
In June 2022 a property company in Henan province, central China, offered to take wheat as part of the down payment on new homes. Buyers in Minquan County could cover up to 160,000 yuan (nearly $24,000) of the deposit with grain, and a month earlier the same firm had accepted garlic for a project in nearby Qi County. The adverts went viral because they captured how desperate developers had become as China's housing market slumped.
The offers were small, local promotions rather than a new way of buying property in China. But they were a vivid sign of a much bigger crisis that was still unfolding years later.
What the wheat and garlic offers actually were
The wheat promotion appeared as an advert on the messaging app WeChat. According to CNN, it was posted by Central China Management, a sister company of the listed developer Central China Real Estate. Early reports, including CNN's first version, attributed it to Central China Real Estate itself, and CNN later corrected that detail. The advert was deleted a few days after it drew attention.
The homes involved were priced at roughly $100,000 to $124,000, according to the property data firm Leju Holdings. The grain counted towards the deposit only, up to the 160,000 yuan cap; buyers still needed a mortgage or cash for the rest.
The earlier garlic campaign was aimed at farmers in Qi County, a major garlic-growing area. The company framed it as helping farmers with love and making it easier for them to buy homes. In practice, it let rural buyers turn their harvest directly into a deposit at a time when crop sales and cash were both uncertain.
Other unusual incentives
Henan was not alone. In Lianyungang, in Jiangsu province, Poly Real Estate offered buyers a 100-kilogram pig, and offered to have it slaughtered for them. None of these gimmicks changed the price of homes; they were marketing tools aimed at getting hesitant buyers to commit.
Why sales had fallen so sharply
China's property sales were collapsing in the first half of 2022. Official figures showed sales down 31.5 per cent year on year from January to May, worse than the 21 per cent drop in the first four months. A private survey found that sales by the country's 100 largest developers fell 59 per cent in May compared with a year earlier.
Several forces combined:
- Debt rules. In August 2020 Beijing introduced the "three red lines", limits on developers' debt relative to cash, equity and assets. Firms that had grown by borrowing heavily suddenly found it hard to raise new money.
- Unfinished homes. In China most new flats are sold before they are built. When developers ran short of cash, construction stalled, and buyers grew afraid of paying for homes that might never be finished.
- COVID-19 lockdowns. Strict restrictions in 2022, including the long lockdown in Shanghai, kept people away from sales offices and hit incomes and confidence.
- A slowing economy. With growth weakening and youth unemployment rising, many families were reluctant to take on large mortgages.
Some commentators at the time also blamed over-investment and local-government reliance on land sales, which had pushed construction well beyond what buyers needed in many smaller cities.
What the industry and analysts said
Developers were open about the strain. Shimao Group, a large Shanghai-based developer, said in a statement that it had seen "a noticeable decline in its contracted sales in recent months," blaming changes in the property sector since the second half of 2021 and COVID-19. Shimao's shares had been suspended in April 2022 after it missed the deadline to publish annual results.
Iris Pang, chief economist for Greater China at the Dutch bank ING, warned that local stimulus would help some sellers but not those already in default. Her reasoning was that buyers would avoid developers that had missed bond payments, fearing their homes would never be completed or properly managed. She expected authorities to keep trying to revive home sales rather than bail out struggling developers. (Some reports wrongly described her as working for Evergrande; she is an ING economist.)
Central China Real Estate itself had reportedly seen its profits fall by more than 40 per cent, and was among the developers trying to manage heavy debts.
Evergrande and the wider crisis
The best-known casualty was China Evergrande Group, once the country's top-selling developer. It breached all three red lines, struggled through 2021, and was declared in default by the rating agency Fitch in December 2021. Analysts worried that a disorderly collapse could spread through banks, suppliers and millions of homebuyers, prompting comparisons with the US housing crash of 2007–2008.
Evergrande never recovered. On 29 January 2024 a Hong Kong court, led by Judge Linda Chan, ordered the company to be liquidated after more than two years without a workable restructuring plan. It had over $300 billion in liabilities.
Others followed into trouble. Country Garden, which had been seen as relatively safe, missed payments in 2023. Shimao faced liquidation petitions in Hong Kong in 2024 and 2025. In mid-2022 frustrated buyers in many cities began refusing to pay mortgages on homes whose construction had stopped, a protest that spread to more than 300 projects.
How the government responded
Beijing's message for years had been that "houses are for living, not for speculation". As the downturn deepened, the government shifted from cooling the market to supporting it:
- Mortgage rates were lowered and purchase restrictions eased in many cities, starting in 2022.
- In 2023 the three red lines were applied more flexibly, and rate floors were cut in areas where prices were falling.
- In 2024 the central bank set up a 300 billion yuan facility to help state firms buy unsold homes for affordable housing, and banks approved large loans to "whitelisted" projects so that unfinished homes could be completed.
Real estate and related industries had been a huge part of the economy, with estimates of their wider footprint running near a quarter of GDP at the 2018 peak. Their shrinking share since then helps explain why the slump weighed on China's growth for years.
What the wheat offer tells us
A deposit paid in grain sounds like a story from another century, and it made for a striking headline. The real meaning was more ordinary. Developers in smaller cities were competing for a shrinking pool of buyers, many of them farmers whose wealth was tied up in crops rather than bank accounts. Accepting wheat or garlic let them reach those buyers while presenting the offer as support for rural families.
For anyone following housing markets, the episode is a reminder that unusual sales incentives are often a sign of stress. When sellers start offering pigs, grain or free extras, it usually means that ordinary price cuts are no longer enough to bring buyers through the door.
Sources: CNN via ABC17 News, 23 June 2022: Wheat down payments and free hogs; Chinese property sector crisis (Wikipedia); Shimao Group (Wikipedia); ING Think: Iris Pang; BusinessDay/Reuters, 29 January 2024: Hong Kong court orders liquidation of China Evergrande; Yahoo Finance, 2022.
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