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China Evergrande Group
Business

Evergrande vows to restart 38 stalled property projects by month’s end to defuse China’s mortgage boycott

  • Evergrande will restart construction on 38 developments by September 30, it said in a statement late Monday, citing Chairman Hui Ka-yan’s weekly staff meeting
  • It has already resumed building on 668 of the total 706 projects, it said

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The construction site of China Evergrande Group’s Royal Peak residential property development in Beijing on Friday, July 29, 2022. Photo: Bloomberg
Bloomberg
China Evergrande Group pledged to resume its remaining stalled projects by the end of the month, as the debt-laden developer tries to allay concerns that prompted some homebuyers to refuse to pay mortgages for unfinished apartments.
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The company will restart construction on 38 developments by September 30, it said in a statement late Monday, citing Chairman Hui Ka-yan’s weekly staff meeting. It has already resumed building on 668 of the total 706 projects, it said.

Cash-strapped Chinese developers are facing pressure to complete pre-sold homes after angry buyers nationwide stopped making loan payments. The mortgage boycotts could pose a threat to social stability ahead of a Communist Party congress next month, at which President Xi Jinping is expected to seek a third term.
Evergrande is at the centre of a credit crunch that has rippled through China’s property sector and curtailed growth in the world’s second-largest economy. Among its 668 projects that have resumed work, 606 have reached normal construction level, while 62 are in the process of returning to normal and will do so this month, Hui said at the meeting.

It’s been difficult to assess the scale of the mortgage boycotts since the government in July began censoring crowdsourced documents circulated online. The trend has raised concern that the property crisis could spread to the financial system. Banks face mortgage losses of US$350 billion in a worst-case scenario, S&P Global Ratings has estimated, although lenders posted much smaller overdue loans in the most recent earnings season.

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Chinese authorities are taking steps to ensure real estate companies finish apartments. In Zhengzhou city in Henan province, all stalled developments must resume by October 6, the Communist Party-run Dahe News reported last week.

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