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As of next month, Shanghai's used home trading will not be conducted through housing agencies. Instead, exchanges will be completed directly through the Internet, last Friday's Wenhui Daily reported.
It means that used home buyers will pay their loans directly to banks via the Internet, thereby minimizing safety concerns, said an industry analyst.
Previously, 80 percent of the used home buyers and sellers entrusted housing agencies with paying or receiving payments, including deposits, initial payments, loans and taxes. However, if the funds were embezzled by illegal agencies, trading had to be suspended, resulting in hefty losses to both buyers and sellers.
Buying a property might be the largest purchase a family makes, so security is the top concern, the analyst stressed.
At present, several banks, such as the Bank of Shanghai, Bank of China and the China Minsheng Banking Corporation, have signed contracts with the Shanghai Real Estate Trading Center for the program.
They will take advantage of the financial opportunities created by the online trading of used properties, according to the banks.
The trading of used homes will be conducted via the Internet very soon, said a spokesman with the Shanghai Real Estate Trading Center.
"Used homes can be traded online as early as January next year. We have begun testing the program," said Gan Zhiyi, general manager with the mortgage center of the China Minsheng Banking Corp.'s Shanghai branch.
"Our housing loan balances have increased from more than one billion yuan (US$120 million) to 11.6 billion yuan currently, exceeding the figure in the Bank of Communications, and much tougher competition is expected for the property credit market in the near future," Gan pointed out. The existing housing agency system is not stable, especially in the area of fund security, she said, adding that service and reputation will become the most important battleground for the banks.
(Shanghai Daily December 27, 2004)
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