Shadow Lending for Chinese Home Down Payments Prompts Crackdown
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A construction site in Wuqing. Lending for property down payments, a phenomenon all but unheard of a year ago, has now prompted plans by the government to halt such borrowing.
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Housing deposit loans by P2P lenders triple since market rout
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Some property agents suspend online mortgages ahead of curbs
When Fu Songtao found his ideal home in the suburbs of Shanghai, he faced the typical problem of would-be homebuyers: Coming up with enough cash for a down payment. So Fu turned to an online solution. His property agent offered him a zero-interest loan, funded entirely online by peer-to-peer lenders, that covered almost half his deposit.
“Everybody I know took out these loans,” said Fu, a 29-year-old employee of a state-owned enterprise, who borrowed 380,000 yuan ($58,000) a year ago, with interest payments to lenders subsidized by the property agent, for his 3 million yuan apartment, and has seen its value increase to 3.3 million yuan since. “If you can borrow like that, why not?”…
Shadow Lending for Chinese Home Down Payments Prompts Crackdown
