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ZHENGZHOU, China: Gao Zhuang says he has refused to pay his mortgage for months, in a desperate protest against the Chinese real estate developer he blames for the endless delays on the unfinished apartment he bought years ago for his son.
It is one of the many victims of the long-running housing crisis that continues to wreak so much misery on the lives of homebuyers, many of whom have little legal recourse in connection with what has become a highly sensitive topic for the government.
The 49-year-old from central Henan bought an apartment in the provincial capital Zhengzhou for 1.2 million yuan ($170,000) in 2019, which he said he was told would be completed in two years.
He staked much of his savings on the apartment, hoping it would improve his son’s marriage prospects and allow his family to begin leaving their poorer, rural hometown behind.
But the developer announced delay after delay, and construction work effectively stopped late last year.
“The main influence was on my son,” said Gao, who asked to change his name to avoid repercussions.
“How can he get married without his place?”
Gao’s condition is not rare.
The mortgage boycott wave swept across the country last summer, as well Cash-strapped developers He struggled to raise enough to complete the homes they had previously sold—a common practice in China.
The issues endemic to the real estate sector came to a head in 2020, when the government cracked down on excessive borrowing and rampant speculation.
Cut off from the easy money that fueled the boom of the past few decades, many businesses are starting to default due to accumulated debt.
The slowing economy was further battered by pandemic-era health restrictions, adding to low consumer confidence and slumping housing demand.
Beijing recently introduced a set of measures aimed at tackling the chaos in the sector.
Although some properties have since been completed, many buyers like Gao are still waiting – while other problems have cropped up, from sudden construction work to disputes over compensation and pressure from local officials.
The real estate crisis has made headlines because of its scale, in particular the tangled industry giant Evergrande, which was courting bankruptcy before announcing a massive restructuring deal.
The smaller regional company building the Gao complex, Henan Jin’en Real Estate Company, is not publicly listed, making it difficult to discern its financial situation.
It did not respond to AFP’s requests for comment.
Disgruntled homeowners say there are an estimated 100 homes left in the complex and the shoddy finishes are evidence the company is struggling.
AFP journalists visiting in June noted collapses in the exterior masonry, holes in the interior walls, loose wiring and unsecured fire doors.
A handful of workers dug trenches and stacked blocks of stone on the perimeter of the site, while the sound of digging came from several houses.
Some buyers said the developer had hired a large group of workers to justify a reported government bailout.
One of the owners said local officials seemed powerless to ensure the completion of the project, adding that “ordinary people suffered the worst”.
“I don’t blame the developer. I blame the government,” the middle-aged man told AFP as he stared at the concrete shell of the apartment.
“Some people here still believe in our government, but I think they are the least worthy of our faith.”
Gao told AFP he stopped paying his monthly mortgage of 5,000 yuan ($700) in January and joined the boycott with others from the compound.
He said his attempts to claim compensation for the delays from the developer were unsuccessful.
“Their attitude was: If you don’t like it, sue us,” Gao said.
“But they know that in China, people like us can rarely afford a lawsuit.”
For others, initial anger gave way to helplessness.
“It’s no use being angry, because there’s nothing I can do,” said Wang, 24, a homebuyer, using a pseudonym.
The online store operator bought a house in the affluent eastern city of Ningbo for 690,000 yuan in 2021, but went out of business later that year.
When AFP visited the site, empty tower facades were surrounded by mounds of upturned earth and pipes, with rusted vehicles standing amidst the rubble.
About a dozen workers sat among stone slabs and overturned trees waiting to be planted, their roots drying in the summer sun.
Wang said he “doesn’t trust” the latest promise that the drug will expire by the end of August.
“After that,” he said, “I wouldn’t buy a house that wasn’t finished yet.”
“I will not believe all the statements made by the government and others.”
China’s leadership has recently lowered mortgage rates, cut red tape and extended more loans to developers in an effort to prop up the industry.
But analysts warn the president Xi JinpingThe government has limited room to maneuver and could face more threats as the debt crisis spreads to state-owned developers and major cities.
The sector outlook, according to a June note from Japan’s Nomura Bank, “looks dire.”
For Beijing, the issue threatens one of its highest priorities – social stability.
Authorities in multiple regions have moved to stifle public complaints about unfinished homes in recent months, according to Mortgage Boycott participants contacted by AFP.
Both Gao and Wang said that local officials contacted them to discourage them from petitioning the government or speaking to the media.
Several other buyers said they had received calls from the police, who they feared were also monitoring their private social media groups.
“I can’t say anything about this,” one of the officials in the initially receiving group told AFP before the call was abruptly cut off.
“The state is controlling this very strictly at the moment.”
It is one of the many victims of the long-running housing crisis that continues to wreak so much misery on the lives of homebuyers, many of whom have little legal recourse in connection with what has become a highly sensitive topic for the government.
The 49-year-old from central Henan bought an apartment in the provincial capital Zhengzhou for 1.2 million yuan ($170,000) in 2019, which he said he was told would be completed in two years.
He staked much of his savings on the apartment, hoping it would improve his son’s marriage prospects and allow his family to begin leaving their poorer, rural hometown behind.
But the developer announced delay after delay, and construction work effectively stopped late last year.
“The main influence was on my son,” said Gao, who asked to change his name to avoid repercussions.
“How can he get married without his place?”
Gao’s condition is not rare.
The mortgage boycott wave swept across the country last summer, as well Cash-strapped developers He struggled to raise enough to complete the homes they had previously sold—a common practice in China.
The issues endemic to the real estate sector came to a head in 2020, when the government cracked down on excessive borrowing and rampant speculation.
Cut off from the easy money that fueled the boom of the past few decades, many businesses are starting to default due to accumulated debt.
The slowing economy was further battered by pandemic-era health restrictions, adding to low consumer confidence and slumping housing demand.
Beijing recently introduced a set of measures aimed at tackling the chaos in the sector.
Although some properties have since been completed, many buyers like Gao are still waiting – while other problems have cropped up, from sudden construction work to disputes over compensation and pressure from local officials.
The real estate crisis has made headlines because of its scale, in particular the tangled industry giant Evergrande, which was courting bankruptcy before announcing a massive restructuring deal.
The smaller regional company building the Gao complex, Henan Jin’en Real Estate Company, is not publicly listed, making it difficult to discern its financial situation.
It did not respond to AFP’s requests for comment.
Disgruntled homeowners say there are an estimated 100 homes left in the complex and the shoddy finishes are evidence the company is struggling.
AFP journalists visiting in June noted collapses in the exterior masonry, holes in the interior walls, loose wiring and unsecured fire doors.
A handful of workers dug trenches and stacked blocks of stone on the perimeter of the site, while the sound of digging came from several houses.
Some buyers said the developer had hired a large group of workers to justify a reported government bailout.
One of the owners said local officials seemed powerless to ensure the completion of the project, adding that “ordinary people suffered the worst”.
“I don’t blame the developer. I blame the government,” the middle-aged man told AFP as he stared at the concrete shell of the apartment.
“Some people here still believe in our government, but I think they are the least worthy of our faith.”
Gao told AFP he stopped paying his monthly mortgage of 5,000 yuan ($700) in January and joined the boycott with others from the compound.
He said his attempts to claim compensation for the delays from the developer were unsuccessful.
“Their attitude was: If you don’t like it, sue us,” Gao said.
“But they know that in China, people like us can rarely afford a lawsuit.”
For others, initial anger gave way to helplessness.
“It’s no use being angry, because there’s nothing I can do,” said Wang, 24, a homebuyer, using a pseudonym.
The online store operator bought a house in the affluent eastern city of Ningbo for 690,000 yuan in 2021, but went out of business later that year.
When AFP visited the site, empty tower facades were surrounded by mounds of upturned earth and pipes, with rusted vehicles standing amidst the rubble.
About a dozen workers sat among stone slabs and overturned trees waiting to be planted, their roots drying in the summer sun.
Wang said he “doesn’t trust” the latest promise that the drug will expire by the end of August.
“After that,” he said, “I wouldn’t buy a house that wasn’t finished yet.”
“I will not believe all the statements made by the government and others.”
China’s leadership has recently lowered mortgage rates, cut red tape and extended more loans to developers in an effort to prop up the industry.
But analysts warn the president Xi JinpingThe government has limited room to maneuver and could face more threats as the debt crisis spreads to state-owned developers and major cities.
The sector outlook, according to a June note from Japan’s Nomura Bank, “looks dire.”
For Beijing, the issue threatens one of its highest priorities – social stability.
Authorities in multiple regions have moved to stifle public complaints about unfinished homes in recent months, according to Mortgage Boycott participants contacted by AFP.
Both Gao and Wang said that local officials contacted them to discourage them from petitioning the government or speaking to the media.
Several other buyers said they had received calls from the police, who they feared were also monitoring their private social media groups.
“I can’t say anything about this,” one of the officials in the initially receiving group told AFP before the call was abruptly cut off.
“The state is controlling this very strictly at the moment.”
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