In mid-2022, a wave of mortgage boycotts swept across China as homebuyers refused to pay mortgages on unfinished apartments. This unprecedented protest exposed deep cracks in China's property development model.
The Pre-Sale Problem
Chinese developers have long relied on pre-sales—selling apartments before construction is complete—to fund their projects. When developers like Evergrande ran out of cash, construction halted on projects where buyers had already started paying mortgages.
Financial System Implications
The mortgage boycotts threatened to cascade through the financial system, affecting banks, local government finances, and household wealth. Beijing's response has been measured but insufficient to fully restore confidence.