Homebuyers have stopped mortgage payments on at least 100 projects in more than 50 cities as of Wednesday, according to researcher China Real Estate Information Corp. That’s up from 58 projects on Tuesday and only 28 on Monday, according to Jefferies Financial Group Inc. analysts including Shujin Chen.
The delayed projects make up about 1% of China’s total mortgage balance, according to Jefferies. Should every buyer default, that would lead to a 388 billion yuan increase in non-performing loans, Chen said. The report didn’t give any estimate for how many buyers are snubbing repayments. Analysts believe that a drop in home values may be another driver for the refusal to meet mortgage payments. “Investors are concerned about the spread of mortgage payment snubs to buyers, simply due to lower property prices, and the impact on property sales,” Chen wrote.
While rising non-performing loans for Chinese banks are “manageable” for now, “more risk events are likely to come, at the backdrop of China’s growth slowdown, residents’ expectation of worse future income, and shrinking property sales,” affecting China’s social stability, Jefferies’s Chen said.Nomura Holdings analysts said the refusal to pay mortgages stems from the widespread practice in China of selling homes before they’re built.
Business Business Latest News, Business Business Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: dailymaverick - 🏆 3. / 84 Read more »
Source: dailymaverick - 🏆 3. / 84 Read more »
Source: dailymaverick - 🏆 3. / 84 Read more »
Source: dailymaverick - 🏆 3. / 84 Read more »