In 2021, just months before the Chinese property giant Evergrande showed the first signs of crisis, Guo Tiernan (whose name has been changed on request) and her husband bought an apartment off-plan for their only child from the top-selling developer. The couple, nearing their 60s, had scrimped to afford the $30,000 (£24,500) down payment on the yet-to-be-built flat. They bit the bullet in pledging to use 75% of their income to pay for the mortgage."We wanted to help our son, to give him a place to start out on once he graduates from college," Mrs Guo told the BBC earlier this month. But just months after their purchase, Evergrande's facade began to crack.
In September 2021, Evergrande failed to repay more than $100 million to offshore lenders. At that time it was estimated that the firm had more than 1.5 million unfinished homes. The default brought to light a real estate crisis in China which is still spiralling two years later. The bankrupt firm has spent the past 18 months trying for a recovery deal, but news this week that its founder Hui Ka Yan and other senior leaders have been detained by police has renewed alarm over its future."I used some of my retirement money for the down payment. We will be paying [off the] mortgage for the next 30 years," says Mrs Guo who was initially told that she would get the keys by December this year.
We don't want to end up with nothing," she said.She told the BBC that she and her fiancée had planned to buy the place as their marital home. Her parents' house had been built by Country Garden, and the young couple had been told they could buy a discounted property in August. But they changed their mind when they heard the firm was on the brink of a default.China's property market accounts for a third of its economy, fuelling concerns about the impact on allied industries, from construction materials such as steel and cement, to household appliances. And yet this is one more crisis for Beijing, which is also battling slowing growth, falling exports and a youth unemployment rate that has risen above 20%.Another user asked: "How will they ever deliver [those] apartments? Many of these units have been paid for by the savings and hard-earned money of several generations across families?"
Beijing has sought to temper public concern. State media has said little about Mr Hui being put under police surveillance, and the foreign ministry appeared to stonewall questions on the subject from reporters at its daily briefing on Thursday. But the news has been a top trend on Chinese social media platforms such as Weibo, with more than 600 million views around the topic of Mr Hui's surveillance alone.Many on Weibo were critical of how Evergrande and other property giants had been allowed to get to this point. Why weren't there enough protections for buyers, users have asked.Because of inadequate mechanisms and regulation, it's almost become a norm that companies could 'blow up'", one user wrote. There appears to be concern that the property crisis could spread to more developers because Evergrande's situation has revealed systemic flaws - the effects of excessive borrowing and deep discounts to lure buyers had drained the firm's coffers.
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