Crowdfunding clicks on to property flipping

With just 11,000 yuan (HK$13,867), 50-year-old Deng Bangfu made his first property investment in China, flipping it in just two months for a profit even as the nation's home prices fall.

Deng and about 300 other investors bought a 14.9 million yuan townhouse in June in the southern Chinese city of Dongguan and sold it in August for 16 million yuan. The vehicle: a peer- to-peer lending and financing website called Tuandai, which is testing a crowdfunding product that meets developers' desire to quicken sales by tapping demand for better returns.

"Now I can tell people I once owned a townhouse, which I could never afford myself all my life," said Deng, an accountant at a technology firm in Dongguan.

"We know that local governments have started loosening home purchase restrictions. As soon as banks ease mortgage curbs, home prices will quickly rebound."

Online investors, who since 2011 helped drive a 50-fold increase in financing through peer-to-peer websites such as Tuandai, are turning to property as falling home prices prompt the government to ease curbs aimed at stamping out speculation. Officials are seeking to revive local-government revenues at the risk of bringing home-flippers back to the market.

"If liquidity recovers, home prices start to go up and sentiment improves," said Andy Chang, Hong Kong-based property analyst at Fitch Ratings.