Homebuyers threaten to stop paying mortgagees for unfinished projects - reports

China Aoyuan

13/07/2022 09:37

HONG KONG, July 13 (Reuters) - A growing number of homebuyer
groups across the country wrote to local regulators and banks
that they will stop repaying mortgages as a protest against
unfinished developments, local media reported.
    According to real estate news outlet Leju, as of Tuesday
afternoon such letters have been issued for at least 14
developments involving 46,000 homebuyers and 35 billion yuan
($5.21 billion) worth of properties.
    In separate report on Wednesday, Leju cited an unverified
list of 84 developments circulating online.
    The homebuyers, who bought the properties in pre-sales many
years ago, were not able to take them over many months after the
scheduled dates as the developers failed to make progress or
complete the construction.
    Many of these developments are in lower-tier cities and
owned by distressed developers including China Evergrande Group
 3333.HK , China Aoyuan Group  3883.HK , Sinic Holdings
 2103.HK  and Shimao Group  0813.HK .  
    Evergrande declined to comment. Aoyuan, Sinic and Shimao did
not respond to Reuters' request for comment.
    In the letters posted online, the homebuyer groups blamed
local commercial banks for improperly granting mortgage loans to
developers and insufficient oversight of the escrow accounts,
resulting in misuse of funds and construction suspension by
developers.
    The letters added the homebuyers will cease mortgage
payments unless developers and commercial banks take action to
resume construction.
    The news deepened worries over the debt crisis in the
sector, further dragging down the property shares listed in Hong
Kong on Wednesday. Country Garden  2007.HK  and CIFI Holdings
 0884.HK  closed down over 8% and 13%, respectively.

($1 = 6.7201 Chinese yuan renminbi)

 (Reporting by Clare Jim; Editing by Tomasz Janowski)
 ((clare.jim@thomsonreuters.com;))