GitHub Becomes Key Source of Data on China’s Mortgage Boycotts
Chinese authorities are censoring data on nationwide mortgage boycotts, forcing upset real-estate investors and citizens to share the real extent of the property crisis on GitHub. The world’s second-largest economy has seen a significant real-estate crunch over recent months, with Bejing trying to limit access to key data sources, which is raising concerns among global investors.
Chinese Citizens Boycott Mortgage Payments Across 86 Cities
The Chinese economy continues to face headwinds as buyers of hundreds of properties refuse to pay mortgage payments, resulting in boycotts across 86 cities. The boycotts have also raised concerns among global investors and pushed down prices of stocks and bonds of China-based property firms such as China Vanke and Country Garden Holdings.
As the information about the boycotts started to spread, the Chinese authorities cut access to the files shared by the upset homeowners on local platforms like Zhihu and Kdocs. Consequently, property buyers moved to the software development platform GitHub, which is now the key source of info on the matter.
Boycotts emerged after buyers halted mortgage payments for over 200 unfinished properties in the country unless construction resumes, according to data shared on GitHub. As a result, sixteen listed banks, including state-backed lending firms, disclosed Rmb 2.8 billion ($414 million) of loans exposed to the boycotts.
While lenders operating in China said that bad housing loans are manageable, some believe that the increasing number of incidents could push big banks and property owners too hard, who have around 70% of their wealth invested in real estate. Enodo Economics head economist Diana Choyleva said the boycotts are “a political protest.”
“It’s not going to be a banking crisis, they are not there. But it a crisis potentially of confidence and one that the Chinese Communist Party fears tremendously,”she added.
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China’s Economic Hardships Continue
The boycotts mark the latest in a series of woes this year for the Chinese economy, which has grown just 0.4% year-over-year in the second quarter. This figure represents the slowest economic growth for China since it contracted by 6.8% in 2020 following the Covid-19 outbreak.
Japanese financial services company Nomura Holdings said buyers are refusing to make mortgage payments mainly due to the common practice in China that involves selling properties before they are even built. For this reason, funds secured from presales are stored in escrow accounts and are later used for construction. The real estate challenges in China persist since last year when it was reported that the country’s housing market owes $2.9 billion in debt payments.
CreditSight senior analyst Zerlina Zeng noted that the “lack of adequate supervision of escrow accounts by local regulators and banks” and inappropriate deployment of funds secured from presales “are likely associated with these mortgage suspension cases.”
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