Mortgage Boycott Shows How Deep China’s Property Crisis Goes
Developers like Evergrande sold homes they haven’t yet delivered, and now some borrowers are refusing to pay.
Unfinished apartment buildings at the construction site of a China Evergrande Group development in Beijing.
Photographer: Andrea Verdelli/Bloomberg
It started as an act of protest by fed-up apartment buyers in a single project in a city in central China. Now tens of thousands of people around the country are withholding payments on their mortgages for homes that developers, including China Evergrande Group, have yet to finish.
The wildcat boycott on loans worth as much as 2 trillion yuan ($296 billion) threatens to deepen China’s real estate slump by shifting focus from the country’s embattled property companies to its massive banks. Lenders have relied on mortgages as their safest source of revenue as Covid lockdowns stifle growth.