Split views on whether housing market puts pressure on China’s divorce rates

DIVORCE is still on the rise in China – the nation that makes up almost one fifth of the world’s burgeoning seven billion population.

The 25 to 29 age bracket accounted for almost two in five of the 3.6 million couples who went their separate ways last year – up nearly four per cent on 2013.

Marriage, on the other hand, dipped for the first time in years as official observers in the country cannot readily explain the reason behind the rising divorce rate.

Some cite social progress for women, while others suggest the country’s one-child policy which, as a result of having no siblings, may affect a person’s negotiation skills and lead to uneasy compromise in married life, according to psychologists.

China leads the world in head of population with 1.35 billion people and yet its housing policy could be behind the rise in marriage breakdown.

First-time buyers in China enjoy financial breaks with lower down-payments and taxes, not available to those purchasing more than one home.

When it comes to a divorce, the husband or wife can get their name removed from the first home and buy the second as if it’s their first – with all the associated benefits.

And, according to popular blogging site Sina Weibo, it’s interesting to note that divorce rates in Beijing went up 41 per cent in the first three quarters of 2013, after the municipal government initiated a 20 per cent tax hike on second-home purchases earlier in that year.

For the last five years Chinese authorities had been raising the minimum down-payment for second homes, partly to halt the housing bubble.

Now China is facing a downturn in economic growth (in their terms) and a faltering property market.

So in March it reduced the down-payment on second homes from 60 per cent to 40 per cent.

“Now that the central bank has lowered the second-home down payment, we’ll have a much lower divorce rate,” one Weibo user forecast.