Low threshold funding model to buy houses
Treasure at Tampines, a popular property in Singapore, brings you the emerging low threshold funding model to buy houses in China.
In the context of de-stocking becoming the main theme of China’s property market, some insiders are optimistic about the model of group-funding to buy a house. However, some in the industry have warned that group-funding speculation faces many risks and requires careful participation. The government should provide rational guidedance.
China’s group-funding industry has ushered in a period of rapid development, and property group-funding projects have also quietly risen. Due to the relatively low threshold, more and more people have begun to join the group-funding house buying. However, industry insiders remind that group-funding and property speculation face a lot of risks and need to be cautiously involved, and the government should also guide them rationally.
Take this scenario. Assume Miss Kelly in Guangzhou is preparing to buy a house with a friend. Because she already owns separate house in Guangzhou and Nanning, according to the purchase restriction policy in Guangzhou, Miss Kelly no longer has the qualifications to repurchase a house, but with the bullish mentality of house prices, she decided to use group-funding as a workaround. According to Kelly’s plan, she and her friend will sign a contract to buy a house in the name of a friend, and indicate the respective proportion of capital contribution in the contract. In the future, after everyone decides to sell the house, they will withdraw profits based on the proportion of capital contribution. Each will also bear the loss according to the proportion.
If the speculation of joint-funding by Kelly and her friend is at most regarded as a “make-up” between friends, then platforms for group-funding of properties appearing in different ways. Low-threshold and high-return advertised by these platforms are attracting more people to use this leverage to invest in property speculation. A second-hand housing group-funding platform claims that with starting prices of 1,000 yuan (RMB, the same below, S$ 212) you can participate in group-funding to buy a house, and one year later you can choose to buy back or sell. According to the website that was launched in last October, this platform has completed the group-funding of nine properties.
A newspaper reported that on a WeChat platform for group-funding property, the investment amount of property speculators recruited started from 1 million yuan. Here is how they operates – the operation team is responsible for property speculation. Investors keep and hold the property. The property speculation operation team does not deal with funds and property rights. The profit of property speculation is divided according to the cooperation plan. Driven by “mass entrepreneurship and innovation”, group-funding is a new type of fund-raising model that is developing rapidly. It was originally a model for raising funds to showcase ideas, but now it has evolved into one of the property speculation channels.
Stay tuned. Treasure at Tampines as a popular property in Singapore will continue to share more property movement.
