China’s housing ministry has praised the arrest of real estate agents accused of spreading false rumours about impending restrictions on home purchases in Shanghai, which helped fuel a buying frenzy and a wave of divorces last month.
Shanghai police arrested seven property agents for “intentionally” spreading rumours to influence the housing market and boost their earnings, according to the police’s official Sina Weibo account. The rumours stated the central bank would raise mortgage downpayment requirements and benchmark interest rates for those who had been divorced for less than a year beginning on September 1.
That led to a spike in prices and sales volumes as homebuyers rushed to lock in mortgages before the regulations took effect. The rumour also incited a surge of divorces late last month as couples sought to evade the new regulations. Shanghai rules forbid migrants who lack a Shanghai residence registration from buying homes unless they are married, and houses are limited to one per family.