Across China, homebuyers are refusing to pay mortgages as property developers drag on construction projects, escalating the country’s property crisis and risks of bad debt for banks.
The payment refusals underscore how the storm engulfing China’s property sector is now affecting the country’s middle class, posing a threat to social stability. Chinese banks already grappling with challenges fromNow is “a critical time for social stability,” said Chan, adding that “the forgoing of down payments may bring social instability.”
The contagion is spreading to banks. Non-performing loans triggered by the wave of mortgage payment snubs could reach as much as 561 billion yuan , about 1.4% of the outstanding mortgage balance, according to Chan.
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