China's homebuyers are running out of patience as the country's real estate crisis threatens to spiral out of control. Hundreds of thousands of homebuyers have begun a "mortgage boycott", refusing to pay their mortgage for unfinished or stalled housing projects.
As of July 18, homebuyers in 80 cities and 200 projects had threatened to stop mortgage payments. Total mortgages at stalled Chinese developments amount to 2 trillion yuan ($296 billion), according to analysts at GF Securities Co. and Deutsche Bank AG.
Home sales have collapsed by nearly 60% compared to a year ago, and the current constant decline of sales (11 months) is pegged to be the worst in China's history. Analysts expect property sales to have dropped 25% from January to June, amidst China's "Zero Covid Cases" strategy. Numerous developments in China have halted as property developers have run out of capital to finish construction.
Across China, real estate developers are getting desperate attempting to sell homes by whatever means possible, even going as far as accepting down-payments in wheat, garlic, watermelons and peaches to cater to farmers.
The trouble began with the Evergrande Group's collapse. It is now snowballing into a crisis that risks engulfing some of the biggest developers in the country, its lenders and a middle class that has significant wealth tied to the property market.
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