Home News He Wanted a Home and a Wife. China’s Property Crisis Left Him With Neither.

He Wanted a Home and a Wife. China’s Property Crisis Left Him With Neither.

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To prepare for the wedding, Zhong Qichao last year bought a two-bedroom apartment along the coast of Lianyungang, the third largest city in northeastern China.

It almost took the village to come up with a down payment of 300,000 yuan ($ 44,500). This is about 45 times his monthly salary. The 27-year-old restaurant owner pooled his entire income and the savings of his farmer’s parents. He borrowed from his relatives and the rest were loaned from banks. He has spent one-third of his monthly salary paying mortgages since closing his deal last March. It was financially difficult, but when development was completed in May next year, he knew everything was okay when he moved with his new wife to a new apartment overlooking the sea.

Unfortunately for some, things didn’t go as planned. In November, the construction of his new home, which is part of a project of 32 buildings called Yuelongfu, stopped because the developers ran out of cash.

Eight months later, as Zhong saw in the rendered image, a bare concrete frame and bare steel bars stand in place of a luxurious residential complex surrounded by lush greenery. Wild grass grows in the abandoned lot, and the underground parking lot is flooded with rainwater and becomes a pond.

His fiancée’s parents did not want to marry a man and daughter without their shelter and canceled the wedding. “Now I don’t have a house, a wife, or a 20-year loan,” Zhong told VICE World News.

Futures are out of balance, monetary or not, as one of the millions of homeowners inside, and troubled developers in China can’t afford the biggest investment in most people’s lives. I am.that’s all 6 out of 10 According to Nomura analysts, pre-sale items were delivered between 2013 and 2020.

Not knowing if his home would be completed, Zhong stopped paying his mortgage earlier this month, joined hundreds of thousands of disgruntled homeowners, and was involved in a growing financial rebellion.

“I came here reluctantly because I had no hope.”

By Sunday, boycott action had spread to 321 properties in 113 cities, according to a GitHub crowdsourced document titled “We Need Home.” 2 trillion yuan ($ 296 billion) Bank loan. Further escalations could have a new impact on China’s collapsing real estate industry and pandemic-hit economy.

The mortgage boycott followed a trouble with some of China’s largest real estate developers. For decades, these companies have bet on ever-increasing home prices and strong economic growth, allowing more and more middle-class families to pursue their dream of owning an apartment. Scattered debt-fueled buildings.

But last year, many homeowners’ dreams began to unravel when China cracked down on debt developers to mitigate the financial risk of the sector, which accounts for a quarter of GDP.

Since then, major real estate companies such as Evergrande, Kaisa, and Sunac have struggled to borrow more to pay off their heaps of debt, so they have defaulted on bonds.

Zhong’s development is one of several projects owned or partially owned by the Hengtai Group and has been stagnant since November. The company denied rumors of bankruptcy at the time, but admitted that it was facing “unprecedented difficulties.”

Local government officials in February said they would find another developer to take over the project, but such an arrangement has not been realized.

Like many homebuyers, Zhong participated in joint action as a last resort. “I’ve come to this reluctantly because I don’t see any hope,” the 400 owners of the Zhong and Yuelongfu projects wrote in a joint letter to developers, banks and authorities.

Inside I had a hard time paying both my mortgage and rent, and I had more debt on my credit card. If he defaults on his mortgage, the bank has the right to seize his property.

“Scrap of this house is all I have, they can take it if they want,” Zhong said. “I don’t care about my credit rating when I can’t even get through.”

Elsewhere in the country, some frustrated homebuyers had no choice but to build their homes from unfinished skeletons without electricity and water supplies. Since March, more than 300 homeowners have settled in the concrete frame of Yihefang, a residential complex in a city in central China in Xi’An. report.. Residents use portable stoves and gas stoves. Since the 21-story building does not have an elevator, some people climb more than 12 steps in the dark every day.

The increase in the number of failed projects is caused by several factors, including a downturn worsened by repeated lockdowns under Beijing’s strict zero COVID policy, said Chen Zhiwu, a professor of finance at the University of Hong Kong. Stated.

“What is really happening is that governments are playing a greater role in economic and financial decision-making, causing more and more distortions. Ultimately, these distortions accumulate. Now there are cracks on many sides, “says Chen.

Mortgages with the risk of bad debt make up only a small portion of the mortgage balance, but some economists warn that financial difficulties in the real estate sector can destabilize the economy as a whole. I am.

“The last thing the real estate market needs is bad news that holds the perception that the real estate market is no longer an investment target,” Moody’s Analytics economist Heron Lim told VICE World News. .. Mortgage suspensions will test the resilience of the financial system, but falling home prices could hinder the economy, he added.

To mitigate the damage, Chinese banking regulators promised “active credit support” to needy developers last week, and some officials offered a grace period to pay mortgages. Reuters report On Monday, the Chinese government will bankroll an unfinished project and launch a $ 80 billion ($ 12 billion) fund to lend to individuals.

Meanwhile, the government has sought to stop anxiety by silencing frustrated homebuyers, censoring analysis, and posting online about the mortgage rebellion.

Zhong, a WeChat group that shares with nearly 500 homeowners, has been suspended for “legal violations.” Some homeowners watched a video of the petition removed from Douyin, the Chinese version of TikTok. Chung himself received a phone call from local police and ordered him to withdraw the dissatisfied clip. And local reporters and television stations refused to cover their difficulties, Zhong said.

“No one is willing to speak for us,” Zhong said. “We see only the positives in the news, not the bad. It’s as if we live in a utopia of our imagination.”

Like many other Chinese, Zhong saw owning real estate not only as a safe investment form, but also as a milestone in life. But the trials shattered his middle-class dreams. “If you allow me to choose again, I will never buy a house. I will never get married and have no children. For us at the bottom of society, just surviving is It’s difficult enough, “said Chung.

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