Shenzhen launches marital information-sharing system with banks to prevent speculators from posing as first-time buyers

New system will let banks discern between genuine first-time buyers and people submitting forged papers to access more favourable terms

Home purchase records from previous marriages will not affect a buyer’s ability to buy homes, as long as they do not still own any property bought during such marriages

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Shenzhen home prices have risen 14.6 per cent so far this year, according to online home portal Lianjia. Photo: Roy Issa

Published: 7:00am, 16 Sep 2020Updated: 7:00am, 16 Sep 2020

Shenzhen, China’s answer to Silicon Valley, has set up an information-sharing system that will allow banks to access homebuyers’ marital status, closing a loophole that let married buyers amass property by submitting forged divorce papers and posing as first-time buyers.

The city currently allows married couples to buy no more than two homes. They can borrow loans of up to 70 per cent of a property’s value at a lower rate for their first home, and up to 30 per cent for a second property. First-time homebuyers, however, enjoy more favourable policies, including a home purchase quota and cheaper loans.

Currently, banks do not have access to homebuyers’ marital records, which are maintained by the Shenzhen Civil Affairs Bureau. The new system will let banks discern between genuine first-time buyers and people submitting forged papers to access more favourable terms.

Shenzhen’s economy grew 7 per cent in 2019, ahead of a national average of 6.1 per cent, according to official data, and its home prices have risen 14.6 per cent so far this year, according to online home portal Lianjia, having already gained 15 per cent last year. The sharing of marital information is expected to curb property speculation in the technology hub.

“It will be the first-ever information-sharing mechanism to be used as a tool to clamp down on property speculation,” said Zhang Bo, chief analyst at 58 Anjuke Real Estate Research Institute. “It completes the profiles of people who come to banks for loans with their marriage history and status. Thus, banks can make better decisions on whether to grant loans and on the amounts granted.”

Homebuyers will not be able to buy more than the sanctioned number of homes, or get cheaper mortgages, in Shenzhen using forged papers any more, said Yan Yuejin, the director of E-house China R&D Institute.