China’s Shadow Monster Can’t be Stopped
5 October, 2016
Investing Beyond the Mainstream: Alternatives
8 October, 2016Euromoney, October 2016
Decoding the Chinese property market has always been a challenging science, but even the savviest analysts may not have appreciated one unlikely driver: divorce rates.
Step forward CLSA regional head of property research Nicole Wong, who has spotted a striking correlation between property prices and divorce rates in Beijing and Chongqing.
The reason is that first home-buyers qualify for cheaper mortgage rates and low down-payments while married, but the married couple only gets one such opportunity between them. Apparently a new pattern involves a couple buying a house in this way, then getting divorced so the other partner can gain the same preferable rates in their own name on a second property – whereupon they usually get married again.
“The mortgage rate is 100 basis points cheaper; the cost of divorce is 18bp,” says Wong. “It’s the best deal in China, probably.”
Full article: http://www.euromoney.com/Article/3591675/BackIssue/96877/Asia-real-estate-Divorce-Its-the-best-deal-in-China
