Growing Nationwide Mortgage Strike Erodes “China Dream”

Homebuyers in more than 150 real estate projects across 20 cities reportedly said they would no longer repay their mortgages.

On July 14th, the China Banking and Insurance Regulatory Commission (CBIRC) promised to strengthen coordination with housing and construction authorities and the central bank to support local governments in “guaranteeing the delivery of homes,” after growing numbers of homebuyers have threatened to stop mortgage payments.

According to a foreign source, Communist China is censoring crowd-sourced documents recording the number of mortgage boycotts spreading across the country, which could hinder a major source of data for global investors and researchers to analyst and predict potential real estate crisis.

In a recent recording, a homebuyer asked, “Who took my money?” This recording reveals the current situation of many homebuyers who are trapped in stalled projects in Communist China. In addition to the obligation to pay mortgages on stalled projects, many of them have to pay rent and pay back their family and friends who lent them money to buy the property. Their financial stress keeps them from getting sick.

They are paying for something they can never own.

Some homebuyers tried to negotiate with bank to extend their loan payment “until apartments are placed in their hands” but it was unsuccessful, according to a foreign source.

Zhang Jie, a shanghai-based lawyer and senior partner at the Yingke Law Firm, said homebuyers have to fulfil their obligation to repay mortgage even when developers halt construction. He explained that homebuyers’ relationship with banks is separate from their relationship with the developers.

Another desperate homebuyer said her family tried to abandon the apartment and walk away from the loan payments. However, this will have a negative impact on the family’s social credit, which will affect their children’s education, the family’s travel prospects and future borrowing from the bank. “To put it simply, this is a bottomless hole,” she said.

According to a local media report, at least 14 properties across the country have issued “Loan Suspension Notices” for unfinished properties, involving 46,000 homebuyers, totalling RMB 34.7 billion. These figures are believed to have been underestimated under the CCP’s censorship.