China’s mortgage boycott quietly regroups as construction idles

BEIJING – Two months since many Chinese home buyers stopped repaying mortgages to protest stalled construction on their properties, a lack of progress at more sites now threatens to intensify the boycott, despite assurances from the authorities.

The mortgage protest was a rare act of public disobedience in China, pushed via social media in late June and forcing regulators to scramble to offer home buyers loan payment holidays for up to six months and pledges to expedite construction.

But with no sign of construction picking up at many projects and no clear guidance from the local authorities, more home buyers have told Reuters that they plan to join others who have stopped paying mortgages.

Mr Wang Wending in the central city of Zhengzhou said he was allowed to delay mortgage payments on his apartment for six months in late July.

However, he would have to pay the due instalments in one go when the moratorium ends, regardless of the state of construction, which was yet to commence.

“What will we do if construction still does not resume after six months? We will directly stop all payments,” he said.

Home buyers in at least 100 cities have threatened to halt mortgage payments since late June as developers stopped building projects due to tight funding and strict Covid-19 curbs.

The threat of more mortgage boycott comes as China prepares to hold the Communist Party congress next month, with efforts to revive an economy plagued by the property crisis in focus.

While censorship on social media has blocked messages and wiped videos of the protests, largely taking them out of public spotlight, the boycott has nonetheless expanded.

A widely monitored list on the GitHub open source site entitled “We Need Home” showed the number of projects across China whose buyers have joined the boycott at 342 on Sept 16, up from 319 in late July.

The authorities in Zhengzhou, the epicentre of the protest, have vowed to start building all stalled housing projects by Oct 6, people with knowledge of the matter told Reuters.

The city will use special loans and urge developers to return misappropriated funds and property firms to file for bankruptcy, the sources said.