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In China, home buyers occupy their ‘rotting’, unfinished properties

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By Eduardo Baptista and Xiaoyu Yin

GUILIN, China (Reuters) – Xu has lived in a high-rise apartment in the southern Chinese city of Guilin that he bought three years ago as his home for six months. clean air.

However, her living conditions were far from what was promised. Unpainted walls, holes where outlets should be, no gas or running water. Every day she walks up and down a few flights of stairs carrying her hose-filled heavy water bottle outside.

“All my family’s savings have been invested in this house,” Xu told Reuters from the Xulan County Mansion complex, whose room consisted of a bed covered with a mosquito net, a few essentials and empty bottles on the floor. There was nothing except being She declined to give her full name, citing the sensitivity of the matter.

Xu and about 20 buyers at the Xulan County Mansion share a makeshift outdoor toilet and gather during the day at tables and benches in the central courtyard area.

They are part of a movement of homebuyers across China who have moved into what some call “rotten” apartments, either to pressure developers and authorities to complete them, or out of economic necessity. Downturn in real estate.

The Shanghai E-House Real Estate Research Institute estimated in July that stalled projects will account for 3.85% of China’s housing market in the first half of 2022. This he equates to an area of ​​231 million square meters.

Some local governments have taken steps to shore up the property market by setting up bailout funds, but buyers like Xu, who paid upfront deposits and have mortgages, are still stuck.

mortgage strike

The proliferation of unfinished apartments has sparked unprecedented collective disobedience via social media. In late June, thousands of homebuyers in at least 100 cities threatened to stop making mortgage payments to protest stalled construction.

With 90% of new homes purchased in China still being “unplanned” during construction, the entire real estate market is highly sensitive to unfinished apartment cases, Shanghai E-House research Director Yan Yuejun said.

“Unresolved, this issue could affect real estate transactions, government credibility and exacerbate developer debt problems,” he said.

Just as the ruling Communist Party gears up for next month’s semiannual Congress, China’s deep property slump drags the world’s second-largest economy along with disruptions caused by tough anti-COVID measures. there is

“Crash From Paradise”

In early 2019, Xu purchased a two-bedroom 70-square-meter apartment. This comes about a year after the developer, Jiadengbao Real Estate, began construction and started selling apartments at about 6,000 yuan ($851) per square meter. Underfloor heating, shared pool, etc.

Block after block of the planned 34 tower complex, work progressed quickly at first.

But in June 2020, Jiadengbao Real Estate made news headlines after a court accused its parent company of illegal financing and seized assets worth 340 million yuan, including a number of apartments in the Xiulan County Mansion. decorated the

Construction was halted in mid-2020, but Xu found out months later and described her feelings at the time as “falling out of paradise.”

Jiadobao Real Estate did not respond to a Reuters request for comment.

Since the debt crisis erupted in 2021, thousands more homebuyers have found themselves in a similar predicament, with cash-strapped developers going bankrupt or abandoning struggling projects.

fencing and undergrowth

One day, the main block of the Xiulan County Mansion building was surrounded by a tall blue fence, and the clubhouse advertised in promotional materials was overgrown with dense undergrowth. It was littered with cement mixers, iron poles and piles of rubble.

Ms. Xu, who is unemployed, said she bought an apartment for her only son. She said her son and her husband, who live in her remote northern Hebei province, blamed her for their financial plight and would no longer speak to her.

“The government hasn’t said anything officially, so I don’t know how long we’ll have to live here,” she said.

She hopes the Guilin government will intervene.

The city government did not respond to Reuters’ request for comment.

Housing authorities in Baoding, the northern city where Xu is from and where the parent company of Jiadengbao Real Estate is registered, said last November that the city government and the Communist Party committee formed a group to resolve the issue. said to have been established.

“If the government really wants to protect people’s livelihoods and resume construction, we will go home,” Xu said.

($1 = 7.0508 Chinese Yuan)

(Reporting by Eduardo Baptista and Xiaoyu Yin. Additional reporting by Beijing Newsroom and Xihao Jiang. Editing by Lincoln Feast.)

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