Global investors and homebuyers in China are losing confidence in the country’s property market, which has entered a new stage of turmoil after a year of falling sales, stalled projects and rising developer defaults.
A movement among homeowners who threatened to stop paying their mortgages on homes under construction quickly gained traction on Chinese social media this week.
People across the country declared that they would do the same if developers did not fulfill promises to deliver apartments that were previously pre-sold.
Shares of some major Chinese banks tumbled on Thursday, led by drops in China Merchants Bank, which fell 3.7%.
Several lenders said they have limited exposure to real estate projects where construction has been delayed, and that mortgage default risks are small and manageable. US dollar stocks and bonds of many homebuilders also fell to lows.
“It’s like a liquidation now,” said Kenny Chung, executive director and portfolio manager at fixed-income hedge fund manager Astera Capital Partners, referring to the sale of homebuilder bonds.
He said investors had lost almost all confidence in China’s entire real estate sector as home sales showed little sign of recovery and the economy overall faces significant obstacles to growth.
Source: CNN Brasil
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