Gao Zhuang says he has refused to pay his mortgage for months, a desperate protest against the Chinese property developer he blames for endless delays on the unfinished apartment he bought years ago for his son.
He is one of many victims of a long-running housing crisis still wreaking misery on the lives of homebuyers, many of whom have little legal recourse on what has become an ultra-sensitive subject for the government.
The 49-year-old labourer from central Henan bought an apartment in the provincial capital Zhengzhou for 1.2 million yuan ($170,000) in 2019, and said he was told it would be completed in two years.
He staked much of his savings on the flat, hoping it would improve his son’s marriage prospects and allow his family to start leaving their poorer rural hometown behind.
But the developer announced delay after delay, and construction work ground to a virtual halt late last year.
“The main impact has been on my son,” said Gao, who requested his name be changed to avoid repercussions.
“How can he get married without his own place?”
Gao’s case is not uncommon.
A wave of mortgage boycotts spread nationwide last summer, as cash-strapped developers struggled to raise enough to complete homes they had already sold in advance — a common practice in China.
Endemic issues in the real estate sector had been brought to a head in 2020, when the government cracked down on excessive borrowing and rampant speculation.
Cut off from the easy money that had fuelled the boom of the last few decades, many companies began floundering under accumulated debts.
A slowing economy was hammered further by pandemic-era health curbs, adding to low consumer confidence and a slump in housing demand.
Beijing recently introduced a raft of measures intended to remedy the disarray in the sector.
Although some properties have since been completed, many buyers like Gao are still waiting — while other issues have surfaced, from slapdash building work to disputes over compensation and pressure from local officials.
‘I blame the government’
The property crisis grabbed headlines for its scale, notably entangling industry giant Evergrande, which flirted with bankruptcy before announcing a massive restructuring deal.
The smaller regional firm building Gao’s complex, Henan Jin’en Real Estate, is not publicly listed, making its financial situation hard to discern.
It did not reply to AFP’s requests for comment.
Disgruntled homeowners say the compound’s estimated 100 undelivered homes and shoddy finishes are evidence the company is struggling.
AFP journalists visiting in June observed crumbling exterior masonry, holes in interior walls, loose wiring and unsecured fire doors.
A handful of workers dug trenches and stacked cinder blocks on the site’s periphery, while the sound of drilling emanated from several homes.
Some buyers said the developer had hired a skeleton staff of labourers to justify a rumoured government bailout.
One owner said local officials seemed powerless to ensure the project’s completion, adding that “ordinary people have suffered the worst”.
“I don’t blame the developer — I blame the government,” the middle-aged man told AFP, gazing around the concrete shell of an apartment.
“Some people around here still believe in our government, but I think they’re the least worthy of our faith.”
‘Nothing I can do’
Gao told AFP he stopped paying his 5,000-yuan ($700) monthly mortgage in January, joining a boycott with others from the complex.
He said his attempts to claim compensation for the delays from the developer had been unsuccessful.
“Their attitude has been, ‘If you don’t like it, sue us,'” Gao said.
“But they know that in China, people like us are rarely able to afford a lawsuit.”
For others, initial fury has given way to helplessness.
“There’s no point getting angry, because there’s nothing I can do,” said 24-year-old homebuyer Wang, using a pseudonym.
The online store operator purchased a home in the wealthy eastern city of Ningbo for 690,000 yuan in 2021, but work stopped later that year.
When AFP visited the site, empty towerblock facades surrounded mounds of overturned earth and piping, with rusty vehicles parked chaotically among the rubble.
Around a dozen workers mooched among stone slabs and upturned trees waiting to be planted, roots drying out in the summer sun.
Wang said he had “no confidence” in the latest promise the property would be finished by August’s end.
“After this, I’ll never buy a house that isn’t finished already,” he said.
“And I won’t believe all the rhetoric the government and others come out with.”
Don’t speak out
China’s leadership has recently cut mortgage rates, slashed red tape and offered developers more loans in a bid to shore up the industry.
But analysts warn President Xi Jinping’s government has limited room for manoeuvre and could face further threats as debt distress spreads to state-owned developers and larger cities.
The prognosis for the sector, according to a June note from Japanese bank Nomura, “appears dire”.
For Beijing, the issue threatens one of its highest priorities — social stability.
Authorities in multiple regions have moved to stifle public complaints about unfinished homes in recent months, according to mortgage boycott participants contacted by AFP.
Both Gao and Wang said they had been contacted by local officials to dissuade them from petitioning the government or speaking to the media.
Multiple other buyers said they had received calls from the police, who they feared were also monitoring their private social media groups.
“There’s nothing I can say about this,” one initially receptive group administrator told AFP before abruptly breaking off contact.
“The state is controlling this too strictly right now.”
