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
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.
“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.”
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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.
The introduction of the new system also suggests Beijing is wary of any threat to China’s hard-won economic recovery following the outbreak of the coronavirus on the mainland. Its concern is premised on the belief that “housing is for living, not for speculation”, which was put forward by Chinese President Xi Jinping in 2017.
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“Now, buyers who are genuinely divorced and want to buy a home will not face any hurdles, while those looking to purchase property for speculation will be blocked” by the new system, E-house China’s Yan said. “We will see more of such mix-and-match policies to ensure the housing market grows in a sustainable way,” he added.
