PEKING (Reuters) – Two months since many Chinese homebuyers stopped repaying mortgages to protest a construction freeze on their properties, a lack of progress at more sites threatens to intensify the boycott despite assurances from authorities.
The mortgage protest became a rare act of public disobedience in China, pushed via social media in late June, forcing regulators to offer homebuyers loan payment vacations of up to six months and pledges to speed up construction.
But with no sign of construction picking up at many projects, and no clear direction from local authorities, more homebuyers have told Reuters they plan to join others who have stopped paying mortgages.
Wang Wending in downtown Zhengzhou said he was allowed to postpone mortgage payments on his apartment for six months in late July.
However, he would have to pay the installments due at the end of the moratorium all at once, regardless of the state of construction, which should still be started.
"What will we do if construction still does not resume after six months? We will stop all payments immediately," he said.
Homebuyers in at least 100 cities have threatened to stop making mortgage payments since late June, as developers have halted construction projects due to tight financing and strict COVID-19 restrictions.
The threat of another mortgage boycott comes as China prepares to hold its Communist Party congress next month, focusing on efforts to revive an economy plagued by the housing crisis.
While social media censors have blocked messages and deleted videos of the protests, largely taking them out of the public spotlight, the boycott has nonetheless expanded.
A widely monitored list on the open source site GitHub titled "We Need Home" showed the number of projects across China whose buyers have joined the boycott on 16. September at 342, compared to 319 at the end of July.
"The government is focusing on social stability and has not thought of solving the problem of unfinished projects," Qi Yu, a homebuyer in the southeastern city of Nanchang. "We can't do anything if the government doesn't help us."
Qi has not serviced his mortgage of 1 million yuan since July.
The Zhengzhou and Nanchang governments did not respond to faxed requests for comment.
The authorities in Zhengzhou, the epicenter of the protest, have promised to have a new Jewish community in place by 6. October to begin construction on all stalled housing projects, people familiar with the matter told Reuters.
The city will use special loans and ask developers to return misappropriated funds and real estate companies to file for bankruptcy, the sources said.
The mortgage boycott has heightened concerns about an ongoing slump in China's property market, which has lurched from crisis to crisis since the mid-2020s after regulators intervened to reduce debt levels.
Beijing unveiled measures, including lowering borrowing costs and helping local governments set up rescue funds to prop up the real estate market.
Although some homebuyers have been assured of this, others say they have been forced to remain silent amid a crackdown on dissent.
In Zhengzhou, 30-year-old Ashley, who gave only her first name, said while construction work on her apartment resumed in the second quarter, only a handful of people were working on the site to, she believes, "reassure homeowners".
Ashley told Reuters she and other homeowners at the development had been warned not to travel to Beijing to protest after the Zhengzhou government repeatedly canceled meetings with homebuyers.
"I received a call from the police this week, they asked me not to go around them to protest to higher authorities," she said. "They said, if anything, I should talk to the local government first, and if they can't solve the problem, they can pass the message on for us."
Ashley showed Reuters a phone log that police had called her 15 times in one day earlier this month. The Zhengzhou Ministry of Public Security declined to comment.
2.3 trillion yuan (43.02 billion yuan) worth of loans.
Beijing has set up a rescue fund worth up to $44 billion and $29 billion in special loans for unfinished projects to restore confidence, sources say.
Sources at developers and banks, however, said it could take some time for these funds to make a difference.
"There won't be money for everyone," said a senior executive of a Shanghai-based developer.
A homebuyer in China Evergrande Group's project in Hefei said he was supposed to get his apartment in 2020, but construction has stalled for the past four years.
Buyers of that project began protesting last year and joined the broader boycott in June, said the homebuyer, who declined to be named.
Evergrande said the company's chairman, Hui Ka Yan, promised at an internal meeting last week to return all construction work to normal by the end of September.
Of Evergrande's 706 projects, 38 have not resumed construction, while 62 have only now resumed.
"We will not repay mortgages again if we do not see material results," said the person, adding that partial construction work resumed at the end of August with only about 20 workers.
"We will continue to protest – we will go to Beijing."