01 augustus 2022
14:19
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The Chinese real estate market is in sackcloth. New home sales plummeted 40 percent. More and more Chinese are refusing to repay their mortgage loans.
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Despite numerous support measures, Beijing is not getting the motor of its real estate market going again. The turnover of the 100 largest property developers in the housing market fell 40 percent in July to $78 billion. Over the first seven months of the year, sales plummeted 49 percent.
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The main cause is the persistent oversupply. Developers built mega-projects with dirt-cheap credit, which found fewer and fewer buyers. Half ghost towns in China are empty.
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The sector is struggling with sky-high debtswhich are getting worse every month due to the mortgage boycott of buyers who still refuse to pay for unfinished homes. In China it is common for apartments to be sold before they are completed. Buyers in at least 100 deferred projects in more than 50 cities have stopped paying off. According to investment bank Jeffferies, these mortgages represent about 1 percent of the number of home loans in China.
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