Analysis of the Cause of Recent Mortgage Boycotts in the Chinese Real Estate Market

Junkai Qian ()
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Junkai Qian: University of California-Davis

A chapter in Proceedings of the 8th International Conference on Financial Innovation and Economic Development (ICFIED 2023), 2023, pp 650-656 from Springer

Abstract: Abstract China, as one of the most populous countries in the world, has a substantial proportion of its real estate industry in its GDP. Millions of people are closely related to real estate, and most Chinese generally believe that only real estate property can provide the foundation of a home. However, recently, real estate companies have encountered severe problems, one after another, and many unfinished properties have been stopped building. Lots of consumers are worried that even if they pay off their loans, they will still not be able to obtain real estate, so they choose to stop paying their loans. With decreasing confidence in the market, we wanted to analyze what caused the situation. In this article, we explain the industry’s history, the recent problems they encountered and combine recent news to determine the cause of the incident. The excessive development of the real estate industry in a short period of time, extremely high rate of mortgage loans, overly optimistic market expectations, and the impact of the economic environment have produced a series of results. We also proposed recommendations to help authorities and consumers navigate the current situation.

Keywords: Real Estate industry; Mortgage; Market expectations (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-142-5_72

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DOI: 10.2991/978-94-6463-142-5_72

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