Image: Reuters Berita 24 English - Many Chinese homebuyers stopped paying their mortgages two months ago because construction on their homes...
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| Image: Reuters |
The mortgage protest was a rare act of public disobedience in China. It started in late June and was spread through social media. This made regulators scramble to offer homebuyers loan payment breaks for up to six months and promises to speed up construction.
But more homebuyers have told Reuters that they plan to stop paying their mortgages because there are no signs that construction will pick up at many projects and there is no clear direction from local authorities.
Wang Wending from the city of Zhengzhou in the middle of the country said that he was able to put off paying the mortgage on his apartment for six months at the end of July.
But when the moratorium is over, he will have to pay all of the past-due payments at once, no matter how far along the building is.
"What will we do if the building hasn't started up again after six months? We'll stop all payments right away, "he said.
Since the end of June, homebuyers in at least 100 cities have threatened to stop paying their mortgages because builders have stopped building projects due to a lack of money and strict COVID-19 limits.
China is getting ready for the Communist Party Congress next month, where efforts to revive an economy hurt by the property crisis will be in the spotlight. The threat of more mortgage boycotts comes at the same time.
Even though censorship on social media has blocked messages and deleted videos about the protests, putting them out of the public eye for the most part, the boycott has grown.
On September 16, a list on the open source site GitHub called "We Need Home" showed that 342 projects in China had buyers who joined the boycott. This was up from 319 projects in late July.
"The government is worried about social stability and hasn't thought about how to fix the problem of unfinished projects," a homebuyer in the city of Nanchang in the southeast said. "If the government doesn't help us, we can't do anything."
Since July, Qi hasn't paid his 1 million yuan mortgage.
The governments of Zhengzhou and Nanchang did not answer faxed requests for comment.
People who know about the situation told Reuters that the protest's centre, Zhengzhou, has promised to start building all stalled housing projects by Oct. 6.
Sources say that the city will use special loans and try to get developers to return money they stole and property firms to file for bankruptcy.
"PLEASURE THE HOMEOWNERS"
The mortgage boycott has made people even more worried about a long-term drop in China's property market, which has been going from one crisis to the next since mid-2020, when regulators stepped in to reduce leverage.
Beijing has come up with plans to help the property market, such as lowering the cost of borrowing money and helping local governments set up bailout funds.
Some homebuyers say they are sure of this, but others say they have been forced to keep quiet because of a crackdown on dissent.
Ashley, a 30-year-old woman in Zhengzhou who only gave her first name, said that work on her apartment building resumed in the second quarter, but that only a few people work there to "please homeowners."
Ashley told Reuters that she and other residents of the development were told not to go to Beijing to protest after the Zhengzhou government kept cancelling meetings with homebuyers.
She said, "This week, the police called me and told me not to go around them to protest to higher authorities." "They told me that if there was a problem, I should first talk to the local government, and if they couldn't solve it, they could send the message for us."
Ashley showed Reuters a phone log that showed that earlier this month, police had called her 15 times in one day. The Public Security Ministry of Zhengzhou did not want to say anything.
BAILOUT
Natixis said in a report last month that about 6% of all loans would be at risk if all unfinished projects led to mortgage boycotts. That's about 2.3 trillion yuan ($43.02 billion).
Sources say that Beijing has set up a bailout fund worth up to $44 billion and special loans for unfinished projects worth $29 billion to restore confidence.
Sources at property developers and banks, on the other hand, said that it could take a while for these funds to make a difference.
"There won't be enough money for everyone," said a top manager at a developer in Shanghai.
A homebuyer in China Evergrande Group's project in Hefei said he was supposed to get his apartment in 2020, but construction has stopped for the last four years.
The buyer, who did not want to be named, said that buyers in that project began protesting last year and joined the wider boycott in June.
Evergrande said that company chairman Hui Ka Yan promised last week in a company meeting that all construction would be back to normal by the end of September.
Out of Evergrande's 706 projects, 38 haven't started building again, and 62 are just now getting back to it.
"We won't pay mortgages again if we don't see real results," the person said, adding that partial construction had started up again with only about 20 workers at the end of August.
"We'll keep protesting, and we'll go to Beijing," they said.
