Protesting Homeowners Across China Stop Paying Their MortgagesChina Photos/Getty Images
News that is entertaining to read
Early Chirp is a free daily newsletter that makes reading the news fun
If you think the housing market in America is rough, try owning a home in China. A number of recent protests over unfair mortgage practices have led many homeowners to give up paying their monthly payments altogether.
One twenty-something living in Zhengzhou said that she had been making mortgage payments on a home that hadn’t even been built.
“After the project is fully resumed, I’ll continue paying,” she said.
“A Very Serious Threat”
Although it’s unclear how many Chinese citizens have taken the drastic step of withholding their payments, experts say the boycott could total $145 billion or more.
Amid the economic toll of continuing COVID-19 lockdowns, there is plenty for China’s homeowners to complain about.
As Oxford Economics explained in a recent report: “Mortgage boycotts, driven by deteriorating sentiment toward property, are … a very serious threat to the financial position of the sector.”
“It Will All Depend On Policy”
While it might be easy for Western consumers to dismiss the crisis in China, it’s important to note the international toll that could result from the ongoing boycotts. As the communist nation’s economy continues to stagnate for a variety of reasons, the problems could reverberate around the globe.
Standard Chartered researcher Ding Shuang explained: “It will all depend on policy. Unlike in other parts of the world where property bubbles break because of the markets, this is government inflicted.”