ZHENGZHOU, CHINA: Gao Zhuang says he has refused to pay back his loan for months, in a stark protest against a Chinese developer who blames him for delays in an unfinished house he bought for his son years ago.
He is one of many victims of the long-running housing crisis that continues to wreak havoc on homebuyers, many of whom have no legal recourse in what has become a critical issue for the government.
A 49-year-old worker from central Henan bought a house in the provincial capital Zhengzhou for 1.2 million yuan ($170,000) in 2019, and said he was told it would be finished in two years.
He saved most of his money on the house, hoping that it would lead to a successful marriage for his son and to help his family move away from their poor hometown.
But the developer announced delays, and construction stopped at the end of last year.
“The biggest influence has been on my son,” said Gao, who asked that her name be changed to avoid repercussions.
“How can he marry without his place?”
Gao’s story is not unusual.
A wave of mortgage strikes spread across the country last summer, as builders of investment funds they struggled to fulfill the homes they had already sold – a common practice in China.
The financial crisis in the real estate industry reached its peak in 2020, when the government clamped down on over-lending and speculation was mounting.
Deprived of the easy money that fueled growth in the past few decades, many companies began to default on their debt.
The sluggish economy was also boosted by health measures taken during the pandemic, adding to low consumer confidence and low demand for housing.
Recently, Beijing has implemented several measures to deal with the problem.
Although some of the properties have been completed, many buyers like Gao are still waiting — as other problems have arisen, from construction to disputes over compensation and pressure from government officials.
The financial crisis took the headlines during its development, especially affecting the industrial giant Evergrande, which was dragged into bankruptcy before announcing a major restructuring agreement.
The small provincial company building Gao’s house, Henan Jin’en Real Estate, is not publicly listed, making its investment difficult to ascertain.
It did not respond to AFP’s request for comment.
Disgruntled landlords say the 100 unfurnished and derelict houses are proof the company is struggling.
AFP reporters who visited in June saw exterior structures, holes in interior walls, loose wiring and unsecured fire doors.
A few workers dug trenches and surrounded the area with timber, while the sound of drilling could be heard from several houses.
Some buyers said the manufacturer had hired staff to confirm the rumors that it had returned the government’s money.
Another owner said that the local authorities seem powerless to ensure the completion of the project, adding that “common people have suffered a lot”.
“I don’t blame the manufacturer – I blame the government,” a middle-aged man told AFP, looking at the concrete shell of a house.
“Some people around here still believe in our government, but I think we are unworthy of our faith.”
Gao told AFP that he stopped paying his 5,000-yuan ($700) monthly loan in January, and joined the protest with other locals.
He said his efforts to seek compensation for the manufacturer’s delay were unsuccessful.
“Their attitude has been, ‘If you don’t like it, sue us,'” Gao said.
“But they know that in China, people like us can’t pay a crime.”
For others, the initial anger has been replaced by helplessness.
“There’s no need to be angry, because there’s nothing I can do,” said 24-year-old home buyer Wang, using a pseudonym.
An online seller bought a house in the wealthy city of Ningbo for 690,000 yuan in 2021, but work stopped that year.
When AFP visited the site, the empty towerblock surrounded piles of overturned dirt and pipes, rusted cars parked chaotically among the rubble.
About a dozen workers sat among the rocks and twisted trees waiting to be planted, the roots drying in the summer sun.
Wang said he had “no confidence” in recent promises that the building would be completed by the end of August.
“After this, I will never buy a house that is not already finished,” he said.
“And I can’t believe all the talk that the government and others come up with.”
The Chinese government has recently cut interest rates, reduced red tape and provided more credit to developers in an effort to boost the industry.
But experts are warning the President Xi JinpingThe government has limited room for action and may face other threats as the debt crisis spreads to public sector builders and major cities.
The forecast for the sector, according to a note in June from the Japanese bank Nomura, “looks difficult”.
For Beijing, this issue threatens one of the most important things – people’s stability.
Authorities in several districts have moved to suppress public complaints about unfinished buildings in recent months, according to participants contacted by AFP.
Both Gao and Wang said they were contacted by local officials to prevent them from petitioning the government or speaking to the media.
Several other consumers said they received calls from the police, who feared they were also monitoring their social media accounts.
“I have nothing to say about it,” a group manager who was previously in the audience told AFP before hanging up.
“The government is managing this very carefully right now.”
He is one of many victims of the long-running housing crisis that continues to wreak havoc on homebuyers, many of whom have no legal recourse in what has become a critical issue for the government.
A 49-year-old worker from central Henan bought a house in the provincial capital Zhengzhou for 1.2 million yuan ($170,000) in 2019, and said he was told it would be finished in two years.
He saved most of his money on the house, hoping that it would lead to a successful marriage for his son and to help his family move away from their poor hometown.
But the developer announced delays, and construction stopped at the end of last year.
“The biggest influence has been on my son,” said Gao, who asked that her name be changed to avoid repercussions.
“How can he marry without his place?”
Gao’s story is not unusual.
A wave of mortgage strikes spread across the country last summer, as builders of investment funds they struggled to fulfill the homes they had already sold – a common practice in China.
The financial crisis in the real estate industry reached its peak in 2020, when the government clamped down on over-lending and speculation was mounting.
Deprived of the easy money that fueled growth in the past few decades, many companies began to default on their debt.
The sluggish economy was also boosted by health measures taken during the pandemic, adding to low consumer confidence and low demand for housing.
Recently, Beijing has implemented several measures to deal with the problem.
Although some of the properties have been completed, many buyers like Gao are still waiting — as other problems have arisen, from construction to disputes over compensation and pressure from government officials.
The financial crisis took the headlines during its development, especially affecting the industrial giant Evergrande, which was dragged into bankruptcy before announcing a major restructuring agreement.
The small provincial company building Gao’s house, Henan Jin’en Real Estate, is not publicly listed, making its investment difficult to ascertain.
It did not respond to AFP’s request for comment.
Disgruntled landlords say the 100 unfurnished and derelict houses are proof the company is struggling.
AFP reporters who visited in June saw exterior structures, holes in interior walls, loose wiring and unsecured fire doors.
A few workers dug trenches and surrounded the area with timber, while the sound of drilling could be heard from several houses.
Some buyers said the manufacturer had hired staff to confirm the rumors that it had returned the government’s money.
Another owner said that the local authorities seem powerless to ensure the completion of the project, adding that “common people have suffered a lot”.
“I don’t blame the manufacturer – I blame the government,” a middle-aged man told AFP, looking at the concrete shell of a house.
“Some people around here still believe in our government, but I think we are unworthy of our faith.”
Gao told AFP that he stopped paying his 5,000-yuan ($700) monthly loan in January, and joined the protest with other locals.
He said his efforts to seek compensation for the manufacturer’s delay were unsuccessful.
“Their attitude has been, ‘If you don’t like it, sue us,'” Gao said.
“But they know that in China, people like us can’t pay a crime.”
For others, the initial anger has been replaced by helplessness.
“There’s no need to be angry, because there’s nothing I can do,” said 24-year-old home buyer Wang, using a pseudonym.
An online seller bought a house in the wealthy city of Ningbo for 690,000 yuan in 2021, but work stopped that year.
When AFP visited the site, the empty towerblock surrounded piles of overturned dirt and pipes, rusted cars parked chaotically among the rubble.
About a dozen workers sat among the rocks and twisted trees waiting to be planted, the roots drying in the summer sun.
Wang said he had “no confidence” in recent promises that the building would be completed by the end of August.
“After this, I will never buy a house that is not already finished,” he said.
“And I can’t believe all the talk that the government and others come up with.”
The Chinese government has recently cut interest rates, reduced red tape and provided more credit to developers in an effort to boost the industry.
But experts are warning the President Xi JinpingThe government has limited room for action and may face other threats as the debt crisis spreads to public sector builders and major cities.
The forecast for the sector, according to a note in June from the Japanese bank Nomura, “looks difficult”.
For Beijing, this issue threatens one of the most important things – people’s stability.
Authorities in several districts have moved to suppress public complaints about unfinished buildings in recent months, according to participants contacted by AFP.
Both Gao and Wang said they were contacted by local officials to prevent them from petitioning the government or speaking to the media.
Several other consumers said they received calls from the police, who feared they were also monitoring their social media accounts.
“I have nothing to say about it,” a group manager who was previously in the audience told AFP before hanging up.
“The government is managing this very carefully right now.”