© Reuters. FILE PHOTO: Surveillance cameras are seen near residential buildings under construction in Shanghai, China July 20, 2022. REUTERS/Aly Song/File Photo
P increased boycotts, despite assurances from the authorities.
The anti-mortgage protest has become a rare act of public disobedience in China, ramped up on social media in late June and forcing regulators to scramble to let home buyers break loan payments for up to six months and commit to expediting construction.
But with no sign of construction starting on many projects and without clear guidance from local authorities, many homebuyers told Reuters they plan to join others who have stopped paying mortgages. .
Wang Waning of downtown Zhengzhou said he was allowed to delay paying the mortgage on his apartment for six months at the end of July.
However, he will have to pay the due installments immediately when the moratorium ends, regardless of whether construction has yet to begin.
“What will we do if construction still doesn’t resume after six months? We will stop all payments directly,” he said.
Homebuyers in at least 100 cities have threatened to halt mortgage payments since late June as developers halted construction on projects due to tight funding and strict COVID-19 regulations.
The threat of more mortgage boycotts comes as China prepares to host a Communist Party Congress next month, in an effort to revive an economy hit by an asset crisis.
While social media censors have blocked messages and wiped out videos of the protests, largely keeping them out of public attention, the boycott is still wide open.
An extensively monitored list on the open-source website GitHub titled “We Need Home” shows that the number of projects across China that buyers have boycotted is 342 as of September 16, up from 319 at the end of July.
“The government is focusing on social stability and has not thought about solving the problem of unfinished projects,” said Qi Yu, a homebuyer in the southeastern city of Nanchang. “We can’t do anything if the government doesn’t help us.”
Qi has not made his 1 million yuan mortgage since July.
The Zhengzhou and Nanchang governments did not respond to fax requests for comment.
Authorities in Zhengzhou, the epicenter of the protests, have announced they will begin construction of all stalled housing projects on October 6, people with knowledge of the matter told. Reuters.
Sources said the city will use special loans and urge developers to return misappropriated funds and real estate companies to file for bankruptcy.
The mortgage boycott has added to worries about a prolonged slump in China’s property market, which has dragged from one crisis to another since mid-2020 after regulators entered the country. fight to reduce leverage.
Beijing has announced measures including reducing borrowing costs and helping local governments set up bailout funds to boost the property market.
While that reassures some homebuyers, others say they have been forced to keep quiet amid a crackdown on dissent.
In Zhengzhou, 30-year-old Ashley, who gave her name only, said while construction resumed at her apartment in the second quarter, only a handful of people worked on the site, which she believes that, “appease the landlords”.
Ashley told Reuters that she and other project owners were warned not to go to Beijing to protest after the Zhengzhou government repeatedly canceled meetings with homebuyers.
“I got a call from the police this week, they asked me not to go around them to protest against the higher authorities,” she said. “They said if there’s anything I should talk to the local authorities first, and if they can’t solve the problem, they can pass the message on to us.”
Ashley showed Reuters phone logs where police called her 15 times in one day earlier this month. Zhengzhou Ministry of Public Security declined to comment.
About 2.3 trillion yuan ($43.02 billion) in loans would be at stake if all unfinished projects were to be boycotted, Natixis said in a report last month. 6% of total mortgages.
Sources say Beijing has set up a relief fund worth up to $44 billion and $29 billion for unfinished projects to restore confidence.
However, sources from property developers and banks say it can take time for those funds to make a difference.
“There won’t be money for everyone,” said a senior executive at a Shanghai-based developer.
A homebuyer at China Evergrande Group’s project in Hefei said he will receive his apartment in 2020, but construction has stalled for the past four years.
Buyers in that project began protesting last year and joined a broader boycott in June, the homebuyer said.
Evergrande said company president Hui Ka Yan vowed in an internal meeting last week to bring all construction activities back to normal by the end of September.
Of Evergrande’s 706 projects, 38 have stopped building, while 62 are just restarting.
“We won’t return the mortgages if we don’t see any material results,” the person said, adding partial construction resumed at the end of August with only about 20 workers.
“We will continue to protest – we will go to Beijing.”