By Eduardo Baptista and Xiaoyu Yin
GUILIN, China (Portal) – For six months, Ms Xu’s home has been a room in a high-rise apartment she bought three years ago in the southern Chinese city of Guilin, attracted by brochures touting the riverfront and city views becomes clean air.
However, their living conditions are far from those promised: unpainted walls, holes where sockets should be, no gas and no running water. Every day she climbs up and down several flights of stairs and carries heavy water bottles outside with a hose.
“All the savings of the family have been invested in this house,” Xu, 55, told Portal from the Xiulan County mansion complex, her room was empty except for a bed with a mosquito net, a few necessities and empty bottles on the floor. She declined to give her full name, citing the sensitivity of the matter.
Xu and about 20 other buyers living in the Xiulan County mansion share a makeshift outdoor toilet and gather around a table and benches in the central courtyard area during the day.
They are part of a movement of homebuyers across China who have moved into so-called “rotting” apartments, either to pressure developers and authorities to complete them, or out of financial hardship, as scores of cash-strapped builders start construction in the midst of the depths of the country adjust real estate slump.
The Shanghai E-House Real Estate Research Institute estimated in July that stalled projects accounted for 3.85% of China’s housing market in the first half of 2022, equivalent to an area of 231 million square meters.
While some local governments have taken steps to prop up the property market by setting up bailout funds, buyers like Xu who have made upfront payments and are looking for mortgages remain in limbo.
mortgage strikes
The proliferation of unfinished homes has sparked unprecedented collective disobedience, fueled by social media: in late June, thousands of homebuyers in at least 100 cities threatened to stop making mortgage payments to protest the construction shutdown.
The story goes on
The entire real estate market is very sensitive to cases of unfinished housing, as 90% of new homes bought in China are bought “on plans” while they are still under construction, said Yan Yuejun, research director at Shanghai E-House.
“If this issue is not resolved, it will affect real estate transactions and government credibility, and could exacerbate developers’ debt problems,” he said.
China’s deep property slump and disruptions brought on by strict anti-COVID measures are battering the world’s second-biggest economy as the ruling Communist Party prepares for its quintal congress next month.
‘DEPARTURE FROM PARADISE’
Xu bought her 70-square-meter, two-bedroom apartment in early 2019, about a year after developer Jiadengbao Real Estate started construction and began marketing apartments for around 6,000 yuan ($851) per square meter, of which they said they were equipped with facilities such as underfloor heating and a shared swimming pool.
The work initially progressed quickly, blocks of the planned complex with 34 towers were erected one after the other.
But in June 2020, Jiadengbao Real Estate made headlines after a court accused its parent company of illegally raising capital and seized 340 million yuan worth of real estate, including a row of apartments in the Xiulan County mansion.
Construction halted in mid-2020, which Xu found out months later, describing her feelings at the time as “falling from paradise.”
Jiadengbao Real Estate did not respond to a request for comment from Portal.
Since the debt crisis erupted in 2021, thousands more homebuyers have faced similar predicaments as insolvent developers went bankrupt or abandoned difficult projects.
FENCES AND UNDERWAX
Recently, the Xiulan County Mansion’s main block was surrounded by a tall blue fence, while the clubhouse, touted in promotional materials, was covered in dense undergrowth. Cement mixers, iron bars, and piles of rubble lay scattered about.
Xu, who is unemployed, said she bought the apartment for her only son, hoping he could start a family there. She said her son and husband, who live far away in northern Hebei Province, blamed her for her financial distress and stopped speaking to her.
“We don’t know how long we have to live here because the government hasn’t said anything officially,” she said.
She hopes the Guilin government will step in to help.
City officials did not respond to a request for comment from Portal.
Housing authorities in Baoding, the northern city where Xu is from and where Jiadengbao Real Estate’s parent company is registered, said last November the city government and the Communist Party committee had set up a group to solve the problem.
“If the government really wants to protect people’s livelihoods and resume construction, we will return home,” Xu said.
($1 = 7.0508 Chinese Renminbi Yuan)
(Reporting by Eduardo Baptista and Xiaoyu Yin; Additional reporting by Beijing Newsroom and Xihao Jiang; Editing by Lincoln Feast.)