China mortgage rules tightened to curb people divorcing to qualify to buy second homes
Central bank orders stricter control of mortgage applications to rein in soaring property prices, including tougher rules on divorcees buying second apartments
China’s central bank, wary of soaring property prices in Beijing, said on Friday banks must strengthen mortgage risk management, and that includes cracking down on home buyers rushing to get divorced to skirt second-home purchase rules.
Growth in prices of Beijing homes in the resale market was the third-fastest among Chinese cities in February, according to the latest official data, mostly driven by speculators.
People who have been divorced for less than a year should not qualify as first-home buyers and banks should not extend property loans to such individuals under first-home policies, the People’s Bank of China said.
Local media reported in October a similar measure was introduced in Shanghai, but the ban only applied for those divorced within six months.
The Beijing municipal government last week imposed an unprecedented series of curbs, including hiking the minimum down payment ratio on second-home purchases to as high as 80 per cent. It kept the rule on first-home buyers unchanged. First-home buyers need only pay a minimum of 35 per cent.