Property developers in Hefei urge the authorities to crack down on home buyers’ protest
In many cases, home buyers refuse to repay their loans because the houses they bought have been left unfinished. China's real estate sector has been in crisis for some time. China’s rulers fear social unrest. Local governments have adopted stimulus measures to encourage home sales.
Beijing (AsiaNews) – A group of property developers in Hefei, Anhui province, wrote to local authorities asking them to crack down on “malicious” protests by home buyers who often refuse to repay loans on unfinished housing projects, Reuters reports.
Under China's current real estate legislation, home buyers are still required to pay their mortgage even when developers default.
China’s housing market has been in crisis for some time, with several groups going bankrupt after the government reduced incentives to invest in the sector.
The World Bank estimates that in 2021 real estate investment in China represented 13 per cent of GDP, which rises to 30 per cent when taking into account inputs along the supply chains.
Chinese households usually focus on buying a house. A survey by China’s central bank, the People’s Bank of China, shows that 70 per cent of their assets are in real estate, while home loans are the main part of their debts.
Chinese leaders fear that real estate-related protests could cause social unrest just before the 20th Congress of the Communist Party of China later this year.
In an effort to counter the slump in home sales, local governments have taken stimulus measures such as relaxing the rules on deposits and lowering mortgage rates.
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