More homebuyers in China have had their dreams of living in a new home dashed after a number of developers went bankrupt last year, leaving millions of unfinished and unsold properties.
Many of the buyers could only vent their anger and frustration on Chinese social media platforms such as Douyin, internationally known as TikTok, over the apartment, dubbed the “decrepit apartment” and representing a lifetime of savings. Police are cracking down on protests.
Experts say a crisis of confidence in a sector that was once a reliable route to wealth creation could threaten China’s growth and stability in 2024.
“The real estate market has historically been a major driver of China’s economy, so if it loses momentum, the long-term average economic growth rate is expected to fall below 5% from 2024,” said Taiwanese researcher Darson Chiu. Stated. Taipei Economic Research Institute responded in writing to VOA Chinese on December 14th.
Among the countless victims, a Douyin user from north-central China’s Henan province named “Happy Life in a Decayed Apartment” posted a video of a local project whose construction has been halted on December 1st. posted a short video clip.
“A year has passed and my apartment remains unfinished. … I hope that construction on the building will resume soon and I will be able to move into my future home,” he said in the video.
The victim in Changsha, Hunan province, identified only as Chen in local TV news reports, said the family was barely scraping by in late 2022 after paying a $700 (5,000 yuan) monthly mortgage. He said he is doing so.
“If the unfinished property continues to rot, I personally will no longer have the courage to survive,” Chen said.
VOA Mandarin approached more than a dozen owners of unfinished homes on Chinese social media platform Douyin, Xiaohongshu, known as RED outside China, and Weibo, a Chinese microblogging site similar to X. , no one responded to the discussion.
Two lawyers in Shanghai and Beijing who specialize in property disputes also declined to be interviewed.
A lawyer in Beijing said the city’s judicial bureau had barred him from speaking to foreign media outlets, citing the “confidentiality of the class action lawsuit.” None of his clients wanted to talk to the foreign press.
China Opposition Monitor, a project of the US human rights organization Freedom House, tracks posts across Chinese social media and has identified 1,841 demonstrations related to the real estate sector between June 2022 and September 2023. were tallied. Final numbers for 2023 will not be available until January, he said. Kevin Slaten, research director of the Taipei-based China Dissident Monitor Project.
Slaten said two-thirds of the strikes were initiated by homebuyers over issues such as project delays, contract violations and alleged fraud, while the remaining strikes were initiated by construction workers demanding unpaid wages. It is said that it is a gift.
A quarter of housing protests involved police repression, but Slaten said this is an underestimate because fragmentary evidence is only captured in video clips.
But the trend toward silencing protesters shows the gravity of the threat to Chinese leader Xi Jinping.
“As a dictator of such a centralized system, as someone who sought to centralize power, he [Xi] “He definitely sees this as a threat to his vision of keeping economic development high and is ensuring that he sees this as a way to bring in people and gather enough support among the population for an authoritarian regime.” We strive to provide that,” Slaten told VOA. Mandarin on the phone.
Ting Lu, Nomura’s chief China economist, said in mid-November that the average construction progress rate would be 50% to complete the homes that were pre-sold between 2015 and 2020 and still have unfinished projects. We hypothetically estimated that $448 billion would be required (research results provided). VOA Mandarin. This equates to approximately 20 million households.
In one of his research papers, dated Nov. 27, Lu called on the Chinese government to “act as the lender of last resort to rescue the real estate sector,” or else the crisis could threaten social stability at some point next year. He argued that it could be a threat.
However, Shanghai-based financial scholar Nan Li disagrees, saying that proceeds from liquidation of assets after a builder files for bankruptcy will be prioritized to ensure delivery of unfinished homes. said it should.
Lee added that any government bailout would only fuel developers’ desire to overleverage.
The biggest companies with the worst debt problems “made the mistake of overleveraging. There is no reason for the government to bail them out,” Lee told VOA Mandarin.
Li pointed out that China’s real estate sector should learn from Guangdong’s experience. In Guangdong Province, the problem of large amounts of unfinished housing around 1997 was finally resolved a few years later when all the non-performing assets of builders were reorganized in a legal manner and in line with the market mechanism.