18 January 2019

Shady agents profit from home curbs

Many local governments have introduced purchase curbs to discourage purchases of a second home or make it harder for non-locals to buy one. The restrictions are intended to rein in speculation.

But in many major cities, prices have remained untamed. In Beijing, they have been rising through the roof.

As a result, Beijingers are becoming increasingly interested in nearby Hebei province where home prices are more affordable.

But they’re not the only ones; many genuine flat seekers are non-residents relocated to the city by their companies and looking for accommodation. Then there are the speculators.

Many entrepreneurs, quick to get over the policy hurdle, have made a profitable agency business out of the situation.

To find out how it works, a Beijing Television reporter posed as a homebuyer from another region seeking a flat near Beijing.

In Hebei, it would be impossible for outside homebuyers to get a mortgage without proof of at least one year of social security contributions. But these agencies can bypass that requirement — for a fee.

The usual trick is as simple as putting together an identity card copy, income proof and a photo. The agencies will then create a dummy company and a dummy job. Contributions to social security accounts are made on that basis.

Sometimes, these agencies hook up with developers and get referrals from them.

But the scam does not always have a happy ending.

Once discovered, the homebuyer is blacklisted by banks. More troubles roll in if the purported buyer fails to complete the transaction.

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EJ Insight writer

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