(Yicai) Aug. 21 -- Authorities in Zhengzhou, Nanning, and other Chinese cities have warned home buyers to avoid getting loans illegally to achieve the so-called zero downpayment for houses.

Zero downpayment schemes cannot solve buyers' problems with short-term lack of funds and require using illegal means, including signing fake contracts and over-evaluating houses, possessing a significant risk of lending fraud, Zhengzhou Housing Management Bureau said early this month. Developers and real estate agents should act by the law, while buyers should act within their means, it added.

With the continuous sluggish Chinese real estate market, some real estate agents have emerged on social media with claims that they can help buyers gain more loans via high appraisals and by using extra loans to make zero downpayments, attracting numerous viewers.

The idea of zero downpayment is risky, uncertain, and unsustainable, the Nanjing Housing and Urban-Rural Development Bureau recently pointed out.

Zero downpayment schemes are illegal and mostly a trap, The Paper reported, citing Yan Yuejin, deputy director of Shanghai-based E-House China Research and Development Institute. China's house purchase policies have been significantly eased, which, combined with lower loan interest rates, led to a dip in home purchasing cost, so there is no need to resort to such methods, Yan noted.

Buyers should postpone their plans to get a house if they do not have enough money to make downpayments, Yan pointed out.

Editor: Martin Kadiev