Sebastien Le Belzic
In China, more and more small owners are refusing to repay their mortgages to protest against developers accused of multiplying interruptions in construction sites in progress, because of their indebtedness. On Europe 1, a real estate specialist explains that Beijing is witnessing an unprecedented “social crisis”.
Just one year after the setbacks of developer Evergrande, a major real estate player in China, a whole series of real estate companies are on the verge of bankruptcy due to lack of cash. Some are unable to continue their work and deliver the homes sold on the scheduled dates. Result: tens of thousands of owners refuse to pay the monthly payments.
250 million square meters of housing to be completed
At the cry of “give us back our money”, thousands of owners demonstrate in front of the offices of a promoter. Scenes broadcast on social networks and which are repeated everywhere in China. “We spent all our money to buy this apartment. But five years after the start of the work, it is still not finished”, testifies a demonstrator on Europe 1. Ultimate solution for this desperate man and his family: squat these few walls and above all no longer pay bills. Like him, more and more landlords are on strike for monthly payments. The country would thus have some 250 million square meters of housing to be completed and the cumulative amount of fallow work amounts to 290 billion euros.
The country on the brink of recession
“One by one, we see these pillars of the Chinese real estate sector collapsing and we are witnessing something that the state wanted to avoid at all costs: a social crisis”, analysis at the microphone of Europe 1 a real estate specialist at the Bloomberg agency. This crisis is shaking the Chinese economy a little more. The country is on the verge of recession. Unemployment is exploding and the effects of the confinements linked to the Covid are adding to the general discontent, while in a few weeks, President Xi Jinping will seek a third historic term at the head of the country.