Tuesday, June 6, 2023
HomeEconomyAnalysis - China's mortgage boycott quietly restructures as construction idles

Analysis – China's mortgage boycott quietly restructures as construction idles

BEIJING (Reuters) – A lack of progress on more plots now could fuel a boycott despite assurances from authorities since many Chinese homebuyers stopped mortgage repayments to protest the stalled construction of their properties for two months. .

Mortgage protests became a rare act of public disobedience in China, pushed through social media in late June and forced regulators to scramble to give home buyers a six-month loan repayment holiday, And promised to speed up construction.

But with many projects showing no signs of starting or clear guidance from local authorities, a growing number of homebuyers told Reuters they planned to join others in stopping mortgage payments.

Wang Zhengzhou Wending said that in late July, his apartment mortgage was allowed to defer for 6 months. End, regardless of construction state n, construction has not yet started.

“What if construction has not resumed after six months? We will simply stop all payments,” he said. Construction projects were halted due to tight funding and strict COVID-16 restrictions.

Threat of more mortgage boycotts Reviving an economy beset by a housing crisis is in focus as China prepares to hold a Communist Party congress next month.

While censorship on social media has blocked news of the protests and removed videos, largely keeping them out of the public eye, the boycott continues to expand.

An extensive monitoring list titled “We Need Homes” on the GitHub open source website shows the number of projects that buyers from across China have joined in September 02 boycott of 342, starting from 62 late July.

“The government focused on social stability and did not consider solving unfinished projects,” said Qi Yu, a home buyer in the southeastern city of Nanchang. “If the government doesn’t help us, there’s nothing we can do.”

Since July, Mr. Qi’s 1 million yuan mortgage has not been paid off.

Zhengzhou and Nanchang governments

Authorities in Zhengzhou, the epicentre of the protests, have vowed to start construction of all stalled buildings by October 6, people familiar with the matter told Reuters. housing project. .

According to sources, the city will use special loans to urge developers to return the misappropriated funds, and housing companies file for bankruptcy.

“Appease Homeowners”

Mortgage boycott fuels fears of a prolonged slump in China’s real estate market, which has slumped after regulators stepped in to reduce leverage Has been in crisis since mid-term 2020.

Beijing has introduced measures including reducing borrowing costs and assisting local governments in setting up rescue funds to support the real estate market.

While this is a guaranteed e-home buyer, others say they have been forced to remain silent as they clamp down on dissent.

In Zhengzhou, 30-year – old Ashley revealed only her name, she said , while construction on her apartment resumed in the second quarter, she believes only a handful of people are working on the site to “appease the homeowners”.

Ashley told Reuters she and other owners of the development were warned not to travel to Beijing to protest after the Zhengzhou government repeatedly cancelled meetings with home buyers.

“I got a call from the police this week and they asked me not to go around them and protest to my superiors,” she said. “They said if there is something I should talk to the local government first, and if they can’t solve the problem, they can forward the message for us.”

Ashley showed Reuters that the police called her Phone records for calls times earlier this month. The Zhengzhou Ministry of Public Security declined to comment.


About 2.3 trillion yuan ($43. If all unfinished Projects are eventually subject to mortgage boycotts (6% of total mortgage loans), and loans worth billion) will be threatened, Natixis said in a report last month.

Beijing sets up a rescue fund worth up to 62 US$ and

US$ billions of dollars in special loans for unfinished projects to restore confidence, sources said.

However, sources from property developers and banks say it may be time to put those funds to work.

“Not everyone has money,” said an executive at a developer in Shanghai.

A homebuyer at the Evergrande Group Hefei project said he was due to 2020 receive his apartment, but construction has stalled for the past four years.

Buyers of the project began protesting last year and joined a wider boycott, said the buyer, who asked not to be named.

Evergrande said its chairman Xu Jiayan vowed at an internal meeting last week to resume all construction by the end of September.

In the 706 project of Evergrande, 38 has not resumed construction, and

just starting over now.

“If we don’t see any material results, we won’t be making any more mortgage payments,” the people said, adding that some construction started in late August Restored, only about 20 workers.

“We will continue to protest – we are going to Beijing.”



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