In many cases, home buyers do not want to pay mortgages on unfinished housing projects. The Chinese real estate sector has been in crisis for some time. The regime’s concern about the risk of social unrest. Local governments intervened with stimulus measures for the purchase and sale of homes.
Beijing () – A group of construction companies in Hefei, Anhui province, has called on local authorities to repress “malicious” protests by home buyers. In many cases, clients do not want to pay the mortgages on unfinished housing projects. As revealed by the agency Reutersthe written request, asking to suppress, was presented on August 2.
Under current regulations in China, when indebted builders are unable to complete real estate projects, home buyers are still required to pay the mortgage.
The sales of the Chinese real estate sector have been going through a crisis for a long time. Several groups went bankrupt after the government reduced incentives to invest in the sector.
The World Bank estimated that in 2021 real estate investment in China represented 13% of GDP. If the supply chain is taken into account, the percentage rises to 30%. Chinese families often devote all their efforts to buying a home. A survey by the Central Bank of China shows that 70% of its assets come from real estate, while mortgages are the main component of its debts.
The Chinese leadership fears that the real estate-related protests will spark social unrest on the eve of the 20th Congress of the Chinese Communist Party. In an attempt to stabilize the drop in home sales, local governments have adopted stimulus measures, such as easing rules on down payment and lowering mortgage rates.