Curbs push China's property agents to lending business for extra revenue

The mainland's major property agents have extended their reach to the microcredit business as they seek new income sources after government curbs caused a slump in sales in the secondary residential market.

Hong Kong-listed property agency Hopefluent, which operates 280 outlets across the mainland from Guangzhou to Urumqi, formed a joint venture last month offering short-term loans, following in the footsteps of rivals such as Shenzhen World Union Properties Consultancy and E- House (China).

Home sales in the secondary market in most cities have tumbled as much as 40 per cent since Beijing barred purchasers from buying more than two homes.

"We lent out 100 million yuan [HK$127 million] right after our venture secured approval from the mainland authorities," said Hopefluent chairman Fu Wai-chung.

The venture, in which Hopefluent has a 92 per cent stake, charged 10 per cent interest a year, compared with the 5 per cent asked by banks, he said.

On the mainland, property owners were required to pay off their outstanding mortgage loans in order to redeem the title deeds when they decided to sell their flats, Fu said.