1 The situation of unfinished buildings in China’s real estate industry is serious. Recently, the largest real estate company “Country Garden” has also reported the risk of debt default. The following moving area has compiled the relevant blood and tears of Chinese owners.Commenthoping to give readers a better understanding of the actual situation.
(Preliminary summary: Integration | Impact of Evergrande’s bankruptcy storm: Comprehensive graphic and text comparison of the real estate loan situation of 56 banks in China)
(Background supplement: Sino-US currency bubble crisis <2> “Chinese real estate” and the underlying logic of RMB dependence)
Since China launched the “three red lines” strong regulatory measures in 2020, many real estate developers have begun to “explode” one after another in 2021. China Evergrande, known as “too big to fail”, officially opened its doors in New York in mid-August this year. Filed for bankruptcy protection, the first wave of bad debts in US dollars is estimated to be 20 billion US dollars.
Against this backdrop of headwinds, even Country Garden, China’s largest real estate company, has reported a debt crisis. The latest information points out that if Country Garden fails to pay interest of US$15 million today (18th) (the last day of the grace period), all of its offshore bonds will be deemed to be in default and trigger cross-defaults on other bonds.
Analysts pointed out that since Country Garden has four times the number of development projects than Evergrande Group, the default situation may be more serious than that of Evergrande, making China’s severe unfinished building dilemma even more severe.
What do the owners of unfinished buildings say?
To put it simply, “unfinished building” means that the construction project has started, but due to various reasons, the construction has been stopped in the middle, and the handover cannot be completed as scheduled, resulting in a half-finished building.
It may be difficult for people in Taiwan to imagine how helpless this situation is: they bought their houses with great joy, only to find that the builder failed, the completion was far away, the government passed the blame, and what is even more annoying is that they still have to pay the loan to the bank… The following dynamic section compiles the information provided by netizens in the well-known Chinese forum “Zhihu” to see “How desperate is it to buy an unfinished building?”
There is a man named “Unspoken rules of the world“A netizen wrote sadly:
I didn’t understand it before. You’ve already built a house with dozens of floors, so why don’t you continue to build it? Later I realized that developers could get regulatory funds if the cap was imposed.
I didn’t understand it before. If a house is unfinished, wouldn’t the developer have anyone to take care of it?
Later I discovered that even if you go to court, the court will usually tell you: If you can’t find the developer, you can’t enforce it. If you can find the developer, please contact us immediately to close the case.
The local government takes the land finance and taxes, the real estate developers take the house purchase money, and the banks make a lot of money. Then all the systems in the entire real estate chain can default without taking responsibility. In the end, only the house buyers cannot default. File for personal bankruptcy.
This design is so unique that it will cut off future generations.
He also cited similar cases in China in the past:
You ask me how desperate people who buy unfinished buildings must be?
If you look at Australia Villa in Guangzhou, 165 buildings have been in disrepair for 30 years, and many people who bought the houses have died. Is there any result? No! In 1998, Australian Villa became the top seller in the Guangzhou property market, with a total of 2,834 families becoming buyers of Australian Villa.
One of them, a recently retired teacher from the Department of Chemistry, spent 170,000 to buy his first house in his life in an Australian villa. It was a two-bedroom house of less than 60 square meters for his retirement. She was 64 years old that year. Three years later, he got the keys to his new home. What he didn’t expect was:
The day has just come when you are about to start defending your rights in retirement life.
The developer suffered a major financial crisis, the building fell into disrepair, and construction came to a complete halt in 2002. Among them, more than 200 of 292 buildings were sold, and only a few 60 were actually delivered. Most of them were unfinished, but buyers had to continue to pay off their debts.
Nowadays, there are still elderly people living there. Because they really have no money to buy new houses, they live in rough houses and make do. Those who have money have bought houses in other places, and those who have no money can only wait, year after year, spring, summer, autumn and winter cycle.
I have never heard of a developer being shot. Even if he was shot, the crime was definitely not because he built ten unfinished buildings…
What’s even more shocking is that if the CCP government cannot arrest the person in charge, will it still be regarded as a treacherous person if it wants to protect its rights? A man named “The spring breeze will accompany you for thousands of miles” Netizens said,
I bought an unfinished building, and because I participated in rights protection, I was classified as a level three risk person by the local petition office! It’s a blacklist.
I live in Zhengzhou. Once I went back to my hometown to attend a friend’s wedding. I thought about drinking, so I stopped driving. The wedding ended the next day and we took the bus back to Zhengzhou from Xiaoxian. At that time, a certain meeting was being held in Zhengzhou, and a people’s policeman was guarding the door of the bus going to Zhengzhou with a machine to scan his ID card! Others’ ID cards were all green, but when I swiped my ID card, it was directly yellow! It shows that level three risk personnel are at risk of petitioning.
The police called my teammates, but they refused to let me get in the car! ! I had just drank a few taels of wine at noon, and I patiently explained for a long time while suppressing the energy of drinking! It’s useless, it just won’t let you go…
There is another one named “jack wolf” netizens described the embarrassing dilemma:
I have a friend from the police station. His deputy director bought an unfinished building in his jurisdiction. Sometimes when he was on duty, he encountered buyers who wanted to defend their rights (protect their rights and interests), and he had to lead a team to maintain order.
What does it feel like? It’s not just a battle of moods.
Other replies also include: “The most desperate thing is actually: from top to bottom, only the buyer cannot breach the contract.”, “If you pay but can’t get something, what is it if it’s not a fraud? And the amount is huge. The problem is that it’s legal.”…
Chinese media visited an unfinished building project in Kunming, Yunnan. Interested readers canGo to browse。
In summarizing the responses from these Chinese borrowers, most of them mentioned one thing, which is that other important entities in the mortgage system, except for buyers, are basically exempt from liability. What is left to the victims is a dilapidated rough house, mortgage pressure, and the hard work of defending their rights without knowing whether there will be an end.
📍Related reports📍
Evergrande shares are suspended from trading in Hong Kong today, and Xu Jiayin is rumored to be under residential surveillance by the Chinese police
China’s largest real estate company “Country Garden” suffered a heavy loss of 200 billion in the first half of the year!Risk of debt default
China’s real estate market “19 billion magnesium bomb” is burning the world!Evergrande New York filed for “bankruptcy protection”, the first wave of US dollar bad debts reached 20 billion
2023-10-22 09:24:04
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