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Euromoney, 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.”

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Chris Wright
Chris Wright
Chris is a journalist specialising in business and financial journalism across Asia, Australia and the Middle East. He is Asia editor for Euromoney magazine and has written for publications including the Financial Times, Institutional Investor, Forbes, Asiamoney, the Australian Financial Review, Discovery Channel Magazine, Qantas: The Australian Way and BRW. He is the author of No More Worlds to Conquer, published by HarperCollins.

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