Among the many negative effects of the collapse on the Chinese real property market, there is simply a comparatively fresh phenomenon, namely the acquisition of housing, whose owners ceased to regulate their lending obligations.
According to a fresh study by China Real property Information Corp. (chin. 中国房地产信息公司), in the first half of 2024 2024 202,000 housing units taken over from people and companies who lost their ability to regulate credit obligations were put up for resold in China. This is simply a 12% increase compared to 2023.
One of the reasons for this is that loans of very advanced value were drawn in fresh periods to buy housing. With adequate payments. Meanwhile, the economical situation in the country and abroad makes the income of any borrowers lower than a year or 2 years ago. home budgets do not let further payments to be made.
Another phenomenon is the financial problems of developers who, in trouble, do not regulate their obligations towards banks lending money to developers for housing projects. The biggest problem in this area occurs in the town of ZhengZhou (chin. 郑州), the capital of HeNan state (chin. 河南). There, as in many another places in China, developers faced financial difficulties, deficiency of funds to proceed work, abandoned, or halted construction projects. In specified a situation, according to Chinese law, where the developer does not regulate the liabilities for the construction loans entered into, the lender may take over the property by executing and covering losses by selling the property at an auction conducted by the court.
According to the China Real property Information Corp. report, the average nationwide price of occupied apartments sold in the first half of this year decreased by 6.7% to 9084 RMB (about PLN 4925) per square metre compared to the erstwhile half. 1 of the factors contributing to the price decrease was the increased percent of housing sold in secondary auctions. Here, as in the case of Polish bailout auctions, the call price during the second bidding is lower than the call price established for the first bidding.
And as in the case of Polish bailout executions, auctioning property does not necessarily let banks to recover borrowed money. The executions in China take place as a consequence of a very slow and costly administrative and judicial process. This prompts Chinese banks to enter into negotiations with customers, establish fresh conditions for the repayment of mortgage loans.
Banks in many large cities specified as Beijing, GuangZhou, ChengDu, or ShenZhen, let borrowers to pay interest on mortgages first and then the chief amount to reduce the financial burden on housing owners.
Based on:
- baijiahao.baidu.com;
- sohu.com;
Author: 梁安基 Andrzej Z. Liang, 上海 Shanghai, 中国 China
Email: [email protected]
Editorial: Leszek B.
Email: [email protected]
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