The mortgage boycotts are a double threat to developers and to the housing market. They have drawn attention to the problem of cash-strapped developers being unable to complete properties that they have already sold, which is putting off new homebuyers. Meanwhile, the boycotts have made banks more cautious about issuing mortgages. Property purchases have plunged this month. Without sales, many more developers will collapse, which is both a financial and an economic threat. The property sector generates around a fifth of China’s GDP. Already, property starts have almost halved from their pre-pandemic level. They are now lower than during the lockdown in early 2020 and at any time since the Global Financial Crisis.
Drop-In (Thurs, 28th July): Our Emerging Asia and China teams will be discussing what lies in store for the region’s exporters as global recession risks rise. Register here to join this 20-minute online briefing.
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