February 23, 2024

China Real Estate Crisis~ Why common Chinese suffering?

If you have to buy an apartment in China, at the time of booking you have to give 40% of the total purchase value of the apartment in advance to the real estate builder company, even when construction not started. Other 60% balance you can get 20 years mortgage loan from bank. So bank also makes balance 60% payment on your behalf to the real estate builder firm & thus your mortgage payment also starts to bank. Therefore this real estate builder companies like Evergrande gets entire sale value of the apartment even before start of the construction. But a common Chinese feels cheated when even after all this entire advance payments to this real estate companies he do not get his apartment in his hands, built & completed. More sad part is that he had to pay his mortgage for an apartment which he did not even received from the builder as this real estate builders announce themselves bankrupt.

Don’t you feel how this real estate companies can go bankrupt when they are recovering entire sale value from buyer & mortgage lender bank even when construction do not start? Answer to this question is simple. Most of the owners & directors of this real estate companies are directly or indirectly involved with Chinese Communist Party. So entire government machinery is guarding this real estate culprits for example Evergrande. And the common Chinese stands cheated! 

excerpts from mail of…

Jong Lee

News Volunteer

Hunan Province