Jul 21, 2022, 04:56PM ISTSource: TOI.in
There has been a significant increase in the number of Chinese homebuyers who have stopped paying mortgages on home loans. Most of these loans are on incomplete projects and lenders are refusing to pay up because developers failed to deliver the homes to buyers on time. Buyers in about 200 incomplete projects have jointly refused make mortgage payments. One report claimed that about 46,000 buyers are involved in just 14 of these projects. The fear now is that the refusal to pay mortgages by buyers means developers will have even less cash to complete ongoing projects, leading to further delays. The slump in the housing sector has also hit Chinese banks as most banks have large exposure to the real estate sector. Some analysts say the refusal to pay mortgages could lead to bad debts of 83 billion at Chinese banks.