In Depth: Regulators Turn Blind Eye to Banned Zero Down Payment Property Deals

China’s developers are offering incentives to encourage home sales, some of which breach the rules, but in a depressed market regulators are being flexible

Disguised zero down payments, which are officially banned in China, have become a growing trend in some cities as developers of new homes and owners of pre-owned homes are desperate to sell in a sluggish market. Experts warn that such practices will distort home price statistics and increase risk for mortgage lenders.

In the southern city of Huizhou, Guangdong province, the developer of a new housing project is attracting buyers with a range of incentives such as zero down payments, complimentary parking spaces and five years of free property management.