Chinese homebuyers have been badly hit by defaults in residential property developments. Numerous families are suffering with unbearable financial loss due to unfinished housing units they purchased. An array of these half-completed residential villas sits right in front of the local district office of Tianjin, the largest coastal metropolis in northern China.
On Sept. 15, homebuyers protested in front of the district office of Binhai New Area, a sub-provincial district and state-level new area within Tianjin which the government once touted as a replicate of developments in Shanghai.
Homebuyers Trapped in Debts
“Sept. 15 of this year happens to be the fifth year after we bought the house. The homebuyers were left with no choice but to defend their rights to the local government,” Wang told the Chinese language edition of The Epoch Times on Sept. 21.However, the local government’s response was, “it’s still under investigation,” according to Wang.
Mr. Cheng (pseudonym) was one of the first phase customers in the presale by Fenghua Land. He invested all his savings and money borrowed from friends and family to pay a down payment of $186,000 in September 2016.
“A business store costs more than $310,000. We have to pay a monthly mortgage of $1,550 plus. I thought when the building was ready at the end of 2017, we could rent it out or do some business on our own to reduce some burden,” Cheng told The Epoch Times on Sept. 22.
However, the construction was halted, even power and water were not connected.
“That house, we haven’t even moved in yet, was already surrounded with weeds, cracked, and even leaking,” Cheng said, moreover, it was only half done.
“The developer found that the local development will not sustain the sale of the properties, and decided to stop the construction. They won’t return the payment or finish the construction. We won the lawsuit, but they won’t pay the penalties for breach of contract,” he said.
Cheng said that many Chinese developers have failed to deliver housing projects, and it’s the government pushing for performance that has resulted in the pit that traps homebuyers.
“There was a leader in Tianjin who believed that since there was a bay area in Shanghai, Tianjin should have one too. The government invited developers over and promised everything. He promised the Tianjin bay area would run parallel to the Shanghai bay area. But now, the Tianjin bay area has become a deserted land,” he said.
“For five years, the construction was abandoned. It’s sitting right next to the government, but no one cares.
“We went to the district government and pulled up a banner, and the management committee said that it would be resolved, but they couldn’t even find the developer.”
The protest on Sept. 15 went on from the morning until 4 p.m. There was no answer from the government.
Cheng said that many families were heavily in debt because of the delay in delivery of the housing. “Basically, each family paid more than $310,000, and there’s no payback for five years. There was a 70-year-old man who bought a house; he almost died after undergoing an operation just a few days ago. The old man wandered around the building every day, just hoping to see his house ready.”
He said there is another man, near 60, thinking of selling his house to pay the mortgage because he has no other income. He was even thinking of jumping from the building.
Collapsed Real Estate Companies
Many Chinese homebuyers have found themselves trapped in the cycle of unfinished homes, without any relief channels.Cheng said: “When we filed the lawsuit in 2018, the developer said that he would hand over the house in 2018. When the lawsuit was filed in 2019, he said that the house will be handed over in 2019. When the lawsuit was filed in 2020, he said the house would be handed over in 2021. There was no one on the construction site; the court didn’t even look at it at all, and it was delayed indefinitely ... now there’s no place for justice.”
The Epoch Times tried to contact Binhai Bay Fortune Center, but the phone was already disconnected.
Cheng said the Chinese land developers still operate businesses in a primitive way, that is: “buying land, borrowing money, drawing a big pie to attract local governmental investments, and selling when the prices go up. If the market is bad, it’s game over.”
He indicated that the real estate industry itself is after huge profits, and when the profit disappears, the project just gets abandoned: “Chinese companies care nothing for credibility. The government does nothing about it ... This is what’s happening in Tianjin, a relatively larger city in China.”
