Millions of Chinese are in limbo as cash-strapped developers halt construction. Some of them may have already been touched by tragedy. The programme Insight uncovers their stories.
HUNAN, China: He was supposed to be married by now and getting ready to be a father next year.
“They said an unfinished apartment isn’t a home, so she got an abortion and broke up with me,” recounted Li, a gig worker. Thousands of home buyers have threatened to boycott mortgage payments. Some of them, such as Li, may have already suffered personal tragedy. Even the rest of the world may pay a price.Li’s unfinished apartment block stands in Xiangtan, one of China’s fourth-tier cities.
But it means making do with apartments without electricity and running water, and using a toilet almost as far as half a kilometre away. The authorities have previously moved to restrict such posts on Chinese social media. Some home buyers took to the streets, but these protests were also quashed, with officials citing COVID-19 concerns.Fearing retaliation, most of the home buyers Insight spoke to requested that their names be withheld. Their growing sentiment, however, is that of despair.
Because of the town’s proximity to Beijing, it became a popular choice for workers who wanted to buy a home but could not afford prices in the capital. “Even if you sold more than 10 homes, you earned only tens of thousands . It was very little for the amount of work required,” he said. Adding to the pain, Beijing sealed its borders after COVID-19 struck, making it impossible for workers to commute from neighbouring provinces, so even Yanjiao’s rental market evaporated.Tu was in a hole and “terrified”. “There was a time when I had no money to buy food and had to sleep in a park,” he recounted.
While pre-sales happen in other places like the United Kingdom, buyers in China needed to make their mortgage repayments before the delivery of the apartment instead of starting payments only upon completion or key collection. “I just thought it was such a big name. I was naive to think that it must be a strong company,” he said. Even when he first heard that Evergrande had run into trouble, he “wasn’t very worried”.
The agency estimates that about two million unfinished homes presold by developers have been halted. There is also a risk that 2.4 million homes presold in 2020 and last year may not be completed on schedule, estimates Bank of America.The impact has spread beyond home buyers, however, to other industries.
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