Century 21 China Real Estate, the exclusive franchisor of the Century 21 brand in China, says it’s out to build its mortgage business under an agreement with the Lending Club of China that’s aimed at funneling cash from investors into home loans.
IFM Investments Ltd., which provides brokerage services, franchise services, mortgage management services, primary services, commercial services and fund management services under the Century 21 China Real Estate brand, has signed a memorandum of understanding with Dianrong.com, a Shanghai-based online credit marketplace that’s known as the Lending Club of China.
“Century 21 China Real Estate’s leadership in China’s primary and secondary real estate markets puts them in an ideal position to connect us with property owners who are looking for more innovative mortgage solutions,” said Dianrong.com CEO Soul Htite in a statement.
Shanghai-based Dianrong.com is an online marketplace that connects lenders and borrowers. The company says lenders “earn returns well above those from bank deposits and wealth management products while borrowers pay rates significantly lower than they do to traditional credit institutions.”
IFM Investments says the Century 21 China Real Estate network covers 24 major cities with 12,100 sales professionals working at company-owned and affiliated brokerages as of March 31. The company posted a $7.6 million first-quarter net loss with revenue down 48 percent from a year ago, to $21.7 million.
Most of that revenue came from company-owned brokerage services ($15 million), followed by primary and commercial services ($4.2 million), mortgage management services ($1.8 million) and franchise services ($600,000). Revenue from mortgage management services was up 43.8 percent from a year ago, accounting for 8.6 percent of first-quarter revenue, “primarily due to the expansion of our mortgage credit loans business,” the company said.
In an attempt to cool down China’s real estate market, authorities last year introduced “Five New Measures” including new capital gains tax regulations, higher down payment ratios, ceilings on new home prices, and limits on investor purchases. IFM Investments said those measures had an immediate effect, denting revenue by 18 percent from the first quarter to the second quarter of 2013.
But the company said at the time that its “diverse revenue streams and a flexible network” make it “well positioned to benefit as the secondary market normalizes.”