Chinese mortgage strikers frustrated as unfinished houses remain stuck – Times of India

ZHENGZHOU, China: Gao Zhuang says he has refused to pay his mortgage for months, a desperate protest against the Chinese property developer he bought years ago for his son after endless delays in the unfinished apartment. feel guilty for.
He is one of the many victims of the long-running housing crisis that is still wreaking havoc on the lives of home buyers, many of whom have little legal recourse on a matter that has become a highly sensitive subject for the government .
The 49-year-old laborer from central Henan bought an apartment in the provincial capital Zhengzhou in 2019 for 1.2 million yuan ($170,000) and said he was told it would be completed in two years.
He bets most of his savings on the flat, hoping it will improve his son’s marriage prospects and allow his family to start leaving their poor rural hometown behind.
But the developer announced delay after delay, and construction work almost came to a halt late last year.
“The main impact has been on my son,” said Gao, who requested his name be changed to avoid consequences.
“How can he marry without his place?”
Gao’s case is not unusual.
Last summer a wave of mortgage boycotts swept across the country Developers facing cash crunch It struggled to raise enough money to complete homes that had already been sold – a common practice in China.
Endemic problems in the real estate sector peaked in 2020, when the government clamped down on excessive lending and rampant speculation.
Cut off from the easy money that fueled the boom over the past few decades, many companies began to falter because of accumulated debt.
A slowing economy was further impacted by pandemic-era health restrictions, which led to a decline in consumer confidence and a decline in housing demand.
Beijing has recently introduced a number of measures aimed at clearing the clutter in the region.
Although some properties have been completed, many buyers like Gao are still waiting – while other issues have cropped up, ranging from slapdash building work to disputes over compensation and pressure from local authorities.
The asset crisis made headlines because of its scale, notably involving industry giant Evergrande, which filed for bankruptcy before announcing a massive restructuring deal.
The small regional firm that built Gao’s complex, Henan Jinen Real Estate, is not publicly listed, making its financials difficult to understand.
It did not respond to AFP’s requests for comment.
Disgruntled homeowners say the estimated 100 undelivered homes in the complex and shoddy finishes are proof the company is struggling.
Visiting AFP reporters in June saw crumbling exterior masonry, holes in interior walls, loose wiring and unsecured fire doors.
A handful of workers dug trenches and stacked cinder blocks along the perimeter of the site, while the sound of drilling could be heard from several homes.
Some buyers said that the developer had hired a small staff of laborers to justify the rumor of a government bailout package.
One owner said that the local authorities seemed powerless to ensure the completion of the project, adding that “the common people have suffered the most”.
Looking around the concrete shell of an apartment, the middle-aged man told AFP, “I don’t blame the developer – I blame the government.”
“Some people around here still believe in our government, but I think they are the least deserving of our trust.”
Gao told AFP he stopped paying his 5,000-yuan ($700) monthly mortgage in January, and joined others in the complex in a boycott.
They said their efforts to claim compensation for the delay from the developer have been unsuccessful.
Gao said, “Their attitude has been, ‘If you don’t like it, sue us. ‘”
“But they know that in China, people like us are rarely able to prosecute.”
For others, the initial fury has given way to helplessness.
“There’s no point in getting angry, because I can’t do anything,” said Wang, a 24-year-old home buyer using a pseudonym.
The online store operator bought a house in the wealthy eastern city of Ningbo for 690,000 yuan in 2021, but the work stopped later that year.
When AFP visited the site, the façades of the empty towerblocks were surrounded by piles of overturned soil and piping, and rusted vehicles stood disorderly among the rubble.
About a dozen workers crawled between stone slabs and overturned trees, waiting to plant saplings, whose roots were drying in the summer sun.
Wang said he had “no confidence” in the latest promise that the asset would be liquidated by the end of August.
“After this, I will never buy a house that is not ready-made,” he said.
“And I will not believe all the rhetoric that is being made by the government and others.”
China’s leadership has recently cut mortgage rates, reduced red tape and offered more loans to developers to boost the industry.
But analysts warn the president Xi JinpingThe government has limited room for maneuver and may face further threats as the debt crunch spreads to state-owned developers and big cities.
The forecast “appears grim” for the sector, according to a June note from Japanese bank Nomura.
For Beijing, the issue threatens one of its top priorities – social stability.
Authorities in many areas have taken steps in recent months to quell public complaints about unfinished homes, according to mortgage boycott participants contacted by AFP.
Both Gao and Wang said they were approached by local officials to prevent them from filing petitions with the government or speaking to the media.
Several other buyers said they had received calls from police, fearing police were monitoring their private social media groups as well.
An initially receptive group administrator told AFP before abruptly breaking off contact, “I can’t say anything about that.”
“The state is very tightly controlling it right now.”