Beijing is putting a halt to couples divorcing in order to buy a second house. Chinese media recently reported that the Beijing government is implementing new rules that hinder mortgage applicants who have been divorced for less than one year.
The divorce loophole has become a trend since laws allowed people who got divorced to get a more profitable mortgage to buy another house, as they would qualify as ‘first-time buyers.’ People would legally divorce, while they actually were not separated. Foreign media like Bloomberg previously called “fake divorce” the “path to riches buying hot China real estate.”
“Houses are for living in, not for speculating with.”
With the changed laws in the so-called “317 New Policy” (“317新政”), banks will now require higher down payments – starting from 60% – for people who were recently divorced. In response to the government announcement, Chinese news website Sohu.com simply headlined: “It’s no use getting a divorce!” (“离婚也没用!”)
PRC newspaper People’s Daily reinforced this message, saying: “Houses are for living in, not for speculating with.”
Looking at online real estate companies for small apartments in the city center of Beijing, an apartment of 33m2 will go on sale for average prices from around $300,000 USD to $400,000 USD (±2,6-2,8 million RMB) or more.
In the Annual Demographia International Housing Affordability Survey, Hong Kong has been repeatedly ranked at the world’s most expensive housing market, but experts say that Shanghai and Beijing might actually have been ranked as the most unaffordable housing areas when it comes to price-to-income ratios if they would have been included in the demographics.
“In my dreams, I can buy whatever I want.”
According to other reports, Beijing ranks number 3 in a list of the world’s most unaffordable housing markets.
As the house prices in Beijing are going through the roof, some media previously said that when two Beijingers get married it is almost as if “two companies are merging.”
On Weibo, many netizens agree with the new policy, but also show bitterness about the hyped housing market in cities like Beijing. “China’s rich people have ruined the housing market,” a typical comment says. “This still doesn’t solve the problem at hand,” one person writes: “Which is that the house prices are beyond all reasonable limits.”
The current prices leave little hope for China’s younger generations to buy a Beijing house in the future: “Maybe I should just save money to buy a house in the village where I’m from,” one commenter says.
“Even if the prices drop to half of what they are now, they would still be unaffordable for the majority of people,” another Weibo user complaints.
“I’ll call it a night and go sleep,” someone else writes: “In my dreams, I can buy whatever I want.”
– By Manya Koetse
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