Mortgage boycott in China exacerbates risks facing real estate

Mortgage payment boycotts in China are a worrying development. But rather than being a potential trigger of crisis, we think they will blunt the impact of government stimulus, thereby raising downside risks to growth in H2 and possibly beyond.

What you will learn:

• The boycotts have arisen because homebuyers have become concerned about whether the homes they purchased from distressed property developers will be completed, rather than because of an inability to service debt.
• The loss of confidence among Chinese homebuyers about property developers is deeply concerning.
• Banking and housing authorities, together with local governments, have stepped in to contain the fallout of the mortgage boycott.