![]() One media report estimated 46,000 homebuyers were involved at just 14 of those projects. These projects are scattered across central, southern and eastern China. Tianmu News, a state-owned digital media outlet, said Thursday that buyers of homes at 100 unfinished projects or more had jointly announced they would stop paying their mortgages. Bloomberg reported that Chinese authorities were holding emergency talks with banks.Īccording to multiple state media reports and data compiled by Shanghai-based research firm China Real Estate Information Corporation (CRIC), buyers across 18 provinces and 47 cities have stopped making payments since the end of June. (ACGBF), said Thursday that they believed the risks were manageable, adding that they were monitoring the situation closely. “Presales are the most common way of selling homes in China, so the stakes there are high,” Nomura analysts said in a research report on Thursday.Īt least seven major lenders, including Industrial and Commercial Bank of China Home prices are also falling, meaning buyers may be locked into a property that is now worth less than they agreed to pay.Īnalysts fear that a payment strike among homebuyers could lead to further defaults by developers, placing additional strain on China’s banks at a time when the world’s second largest economy is struggling to recover from a sharp Covid-related slowdown. The payment boycott comes as a growing number of projects have been delayed or stalled by a cash crunch that saw giant developer Evergrande default on its debt last year and several other companies seek protection from creditors. These funds are used to finance construction by the developers. In China, real estate firms are allowed to sell homes before completing them, and customers have to start repaying mortgages before they are in possession of the new property. China’s real estate crisis is escalating, raising concerns about growing risks in the banking system.ĭesperate homebuyers across dozens of cities are refusing to pay mortgages on unfinished homes, according to state media reports and economists at international banks.
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