Soaring property prices are once again grabbing the headlines in mainland media.
In the past few years, government policy has seen many twists and turns, sometimes to the tighter side and sometimes to an easing bias, as the property market went through up- and down-cycles.
As homes prices are spiking again now, there are expectations of fresh stringent policies. This is prompting some people to make “preemptive” moves ahead of the potential policy changes.
And such moves can sometimes assume bizarre dimensions, as a China Securities Journal report reveals.
The newspaper recently published a front-page story on how a Shanghai couple has gone to the extreme length of faking a divorce in order to be able to buy a bigger home.
After learning they will have another baby, this couple had been aiming to get a bigger apartment. Under current rules in the city, one has to pay 50 percent upfront when purchasing a second home. Also, second-home buyers are not allowed to use part of the pension savings for payment.
There is also a difference in interest rate. First-time homebuyers get a discount while second-homebuyers have to pay 10 percent more interest.
After detailed calculations, the Shanghai couple agreed that getting a divorce is the best way to fulfill their goal.
According to the plan, the two will get married again after they have secured a bigger apartment.
Media reports say such fake divorce cases have surged recently in China due to rumors of tighter property rules, such as the introduction of purchase quota.
Some people are propelled by a genuine need for bigger houses, while some are resorting to tricks just to get their hands on additional properties and make a quick buck.
While talk has been around for many years about a bursting of the China property bubble, housing prices, especially those in top-tier cities, have kept scaling new heights after intermittent bouts of correction.
Now, why is this happening, given the nation’s economic slowdown?
The reality is that easier monetary policies designed to help stimulate the economy have also fueled property speculation, particularly in big, crowded cities where demand is always strong.
The terrible stock market tumble last year, meanwhile, has reinforced people’s belief that property investment is a much safer bet than equities.
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