China's real-estate market is in such a slump that cities are offering discounts for group purchases and tasking civil servants with selling apartments

• To drive up sales, some cities in China have come up with unusual measures.
• They include arranging for residents to make property purchases as a group for discounts.

China's real-estate market is in distress, with home buyers refusing to pay their mortgages and home sales slumping 40% by value in July from a year ago.

The developments follow Beijing's crackdown on excessive borrowing in 2020, leading to last year's Evergrande debt crisis, which has since spilled over to other developers. The cash crunch has led to stalled projects and massively depressed buying sentiment amid economic headwinds due to ongoing pandemic restrictions.

To drive sales, some cities in China have come up with unusual methods, such as arranging for residents to make property purchases together as a group, government-backed The Paper reported in July. The practice is ongoing, according to an Insider review of local news media reports.

Such collective buying is taking place primarily in smaller cities with high numbers of readily available housing, according to The Paper. At the time, the city of Huanggang in the central province of Hubei was giving a discount of at least 3% to any group with at least 20 buyer, per the media outlet.

Meanwhile, a video of a Communist Party official urging people to buy more apartments in the southern province of Hunan has gone viral. "If you've bought one, then buy two. If you've bought two, buy three. If you've bought three, buy four," said Deng Bibo, a county party secretary of China's Hunan province, at a real-estate fair on Tuesday. Deng addressed party cadres and leaders in his speech.

China's leadership appears to be taking the lead in trying to shore up the country's property market, as some civil servants in the small eastern city of Sixian have been tasked with selling properties to their family and friends, Reuters reported on Wednesday, citing Yicai financial news outlet.

"Civil servants should mobilize their friends and relatives to take practical action towards purchasing homes," the Sixian government reportedly told civil servants.

The moves come as China's developers and authorities try all means to boost sales in the depressed market. Recently, some desperate developers have been accepting crops such as wheat and garlic as down payments for rural properties.