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China’s Wave of Mortgage Boycotts Has Spread to 340 Locations in 190 cities

Numerous unfinished real estate, also known as “rotten-tail” buildings in China, has led property owners to engage in a wave of mortgage payment suspensions, By September 6, This  involved 119 cities and a total of 340 projects, and 2022 property owners, raising concerns that the payment suspensions may continue to worsen economic development.

The wave of mortgage suspensions triggered by “rotten-tail” buildings began in July, with many property owners stopping payment on their mortgages, issuing one “loan suspension notice,0, after another, demanding that real estate developers resume their construction work in full, or they will stop paying the principal and interest to the banks.

A person involved in the suspension of loans collected some data and stored it at the online repository GitHub (WeNeedHome). The collection at this site showed, on September 6, that the suspension of mortgag payments on property cumulatively involved up to 340 sites in 119 cities across the country. The number is still climbing. Henan Province tops the list with 66 sites, followed by Shaanxi Province and Hunan Province.

On top of that, banks that could not collect on their loans were among those affected, with the share price of Shenzhen-based financier Ping An Bank falling as overdue payments on suspended homes reached 78 million yuan ($11.3 million).

Source: Radio Free Asia, August 18, 2022 (figures updated on September 6)