China Mortgage Boycotts Grow as Home Buyers Regroup Online

China’s mortgage boycott may be picking up steam, even as authorities try to stem the crisis with support measures. 

A highly-watched list on the GitHub open-source site titled “WeNeedHome” showed that homebuyers are boycotting 342 projects in 119 cities, up from about 320 in 100 cities in early August. There are a high number of boycotts in the central Henan and Hunan provinces.

China’s deepening property crisis and a nationwide mortgage boycott have sparked turmoil in its economy and impacted millions of homeowners this year. Authorities have sought to defuse the property crisis with a raft of measures, including cutting interest rates, asking banks to meet the reasonable financing needs of developers, and offering special loans through policy banks to ensure property projects are delivered.

A fragile recovery

The sector’s recovery remains fragile. China’s home prices declined for a 12th consecutive month in August. At banks, the proportion of bad loans related to property has surged to 30%, according to Citigroup Inc. estimates. 

GitHub is a popular file-sharing site for coders and is a source for people to post documents. The information also offers a gauge for global investors and banks to measure the scale of the unfolding protests. China authorities previously censored crowd-sourced documents on similar platforms to tame the crisis. 

The lost confidence of homebuyers

“The government support is not strong enough to reverse the lost confidence of homebuyers from regulations and the zero-Covid policy,” said Natixis SA senior economist Gary Ng, who added that the number of boycotts may continue to grow, albeit at a slower pace.

Home sales in the past few months are only about 70% of the historical average, Ng said, adding that chances of a quick rebound in the sector are small, and residents and developers remain skeptical about whether support measures will last.