(ECNS) -- Some Chinese in their twenties are making plans to buy apartments in partnership and wait for them to increase in value, but experts warned that there will be risks, Securities Times reports.
A man surnamed Zhuang said he bought a 40 square meter apartment at about 2 million yuan ($305,600) in Chaoyang District together with his friends. They signed an apartment purchase agreement before crowdfunding, and committed to selling the property in 2 to 5 years with at least two investors agreeing.
Zhang has no Beijing hukou (registered permanent residence), which is a barrier to buying a flat in the capital city as the Beijing municipal government issued rules limiting house purchases to cool the property market in 2010.
Such rules also prohibited additional home purchases by Beijing families who own two or more apartments and limits non-Beijing resident families to one apartment.
Non-Beijing families who have no residence permit or documents certifying they have paid social security or income tax in the city for five straight years are banned from buying apartments. Therefore, shared ownership can clear regulatory hurdles.
Crowdfunding a house can be a smart investment but there are risks as well, said Liu Xiuhong, a senior partner at Beijing Aoxiang Law Firm.
China's property law stipulates that all home co-owners must be on the housing certificate. "If only one name is present, the house is a private property, instead of an estate in common," Liu explained.
"Yet if the co-investor has signed an agreement before buying, any property dispute can be solved in accordance with loan relationships. Then the property owner only needs to return funds paid by other buyers," he added.
Statistics from China Index Research Institute show prices of newly built residences in Beijing rose by 8.99 percent while resold apartments increased by 12.83 percent year-on-year in February.
