Rumors expose problems in property market

SHANGHAI POLICE HAVE detained seven real estate agents for spreading rumors about the government introducing new home purchase restrictions, which led to a jump in divorce rates and a property buying frenzy in the city. Beijing News commented on Monday:

The seven Shanghai property agents were no doubt pursuing better sales and commission fees, but the house-purchasing frenzy they triggered in the city with their rumors shows that something is wrong with the metropolis' real estate market.

Restrictions on the purchasing of extra properties are meant to cool the overheated real estate market in major cities. However, homebuyers who believe house prices will keep soaring in the big cities and who have the wherewithal to buy are inclined to purchase more houses while they are still "affordable".