China’s Zhengzhou city is creating a property developer bailout fund as increasing numbers of homeowners join a nationwide boycott of mortgage payments on unfinished houses.
The bailout, one of the first to deal with the intensifying mortgage revolt in China, will be jointly established by Henan Asset Management and developer Zhengzhou Real Estate Group, according to a statement from the asset manager. The two entities are backed by the financing arms of the local government.
Bailout measures for the property sector are being watched closely by investors after hundreds of thousands of homebuyers threatened in open letters to halt payments, aggravating a property sector crisis that is weighing on China’s economic growth.
The boycott has spread to more than 300 property projects in China as of Sunday from 200 projects last week, according to a crowdsourced document titled “WeNeedHome”.
Evergrande, the world’s most indebted developer, Sunshine City, Sunac and Kaisa are among the developers hit by the boycott.
