The real estate market in Beijing is still rising, with a price increase of around 16% in 2013, a bad result according to Beijing authorities that are willing to calm down the real estate market. There is a lot of concern because of the eventuality of a real estate bubble, and above all about the risk that the rising Chinese middle class would become unable to afford housing.
This is the reason of a number of measures taken by the authorities to cool down the market, but some of them have side effects, sometimes weird ones.
One of these side effects is the divorce rate in Beijing and other Chinese large cities. This is a source of sarcasm on the Chinese web, with people ironically praising the achievement of the real estate policy: the price control has had limited effects on the prices themselves, at least in Beijing where the prices are still rising, but there is a clear effect on the divorce rate, 41% increase in only nine moths, with a total number of 40.000 divorces.
This is actually because of a 20% tax on the capital gain regading sales of apartments, but there is a flaw in the law. In some cases, you can divorce, get back the property of the goods, sell them without having to pay the new tax, and then marry again and live happily ever after.
In China the average price of new propertie has risen by 9,1% within one year, meaning that the new tax is a kind of failure, but in some Shanghai and Beijing areas, the rise can be dramatic, sometimes 40% a year for high end real estate.
This tax doen not come alone, there is a whole set of measures with restrictions, it is difficult to buy a second or a third apartment, strong restrictions for non residents and the result is simple: a whole part of the Chinese society has no access to property, with the social risks that are associated with such a siuation.
The divorce is really worth it, the money spared can amount to tens of thousands of euros. There is a twist, actually, as underlined by the authorities, there is a risk: that the former partner does not wt to marry again.
Then there might be a solution, since there is buying retriction for non residents and some agencies have dared to ofer weddings with Beijing residents in order to enable non residents to buy apartments in the capital city, the diveorced peopel can find a non resident and marry again… maybe. All these problems underline how difficult is the real estate market in contemporary China.
Leave a Reply