They Poured Their Savings Into Homes That Were Never Built

For Tang Chao, the apartment in northeastern China is where he and his wife will start a new life together.

They put down tens of thousands of dollars for it. But months ago it was scheduled to be finished, a concrete shell with wires sticking out of the walls and piles of dirt on the floor just for the cost. Not long after, the marriage broke up.

In another town, a man bought a place for a wholesale business that he thought would help his young son have a better future. A woman pays for an apartment where she imagines her little boy will grow up safely, and she might even have a second child. In Shanghai, a technician from a small town thinks he has made his parents proud by buying a new house in the big city.

What these and hundreds of thousands of other Chinese homebuyers don’t know is that the country’s real estate boom is coming to an end. Developers are running out of money amid a government crackdown on massive debt and a slowing economy. They stopped building.

Across the country, instead of apartment towers, uninhabitable concrete structures rise from dormant construction sites. Angry homebuyers in more than 100 cities rose up in a rare act of collective rebellion last year, vowing not to pay off mortgages on unfinished properties.

We spoke to four people who emptied their savings and took out a large loan for an unfinished house. They told us about the frustration and showed us the apartment that is now a terrible reminder of dashed dreams and broken promises.

“It was a simple dream – to have a house, a family,” Mr Tang said.

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Daisy Xu, a 28-year-old lab technician, remembers buying an apartment in Shanghai like it was yesterday.

He had been waiting anxiously with hundreds of other potential buyers in the hotel ballroom at a sales event for Royals Garden, a new development. When his turn finally came, he was given less than a minute to choose an apartment.

He scanned the wall where the number of unsold apartment units was pinned. He knew he didn’t want a penthouse or anything lower than the fourth floor. He chose an apartment on the eighth floor, and told the sales staff. He tore the strip off the wall and handed it to her.

“Congratulations, new home owner!” presenter announced.

Ms. Xu was very happy. The apartments were sold that day, dashing the hopes of others who had been behind them.

“I was so happy and happy, I immediately took a photo of the unit number and told the people at home about the good news,” Ms. Xu said.

The apartment costs about $495,000, which is expensive but affordable compared to older homes in Shanghai. He wanted a place with two bathrooms, giving his parents or in-laws more privacy if they visited. The property overlooks the river and is away from the busy street full of restaurants.

Mrs. Xu was supposed to get the keys in September and move in earlier this year. But the complex has nothing to do. The unpainted 16-story building is wrapped in green netting and surrounded by weeds and debris. He was sickened by the sight of the site as he worked from the apartment he rented nearby.

In China, about 90 percent of new homes are sold before they are built. This presale model allows developers to raise cash quickly, but shifts a lot of risk to buyers like Ms. Xu. They must pay in full before construction begins, often taking out a mortgage to do so.

Regulations require that money from presales be used only for the construction of the project. But so far, oversight is lacking and developers will use the funds for whatever they want, including starting other projects.

As house prices rise, the government tightens funding rules for developers in the hope of preventing a collapse of the housing sector. Many large developers – like China Fortune Land Development of the Royals Garden project in Shanghai – buckled under the weight of massive debt and had to stop work.

Despite the delay, Ms. Xu continues to pay more than $1,300 a month in mortgage payments.

He said he hid the problem from his parents. He is from a small town in southern China and owning a property in Shanghai is the ultimate proof that he has earned it.

“I avoided the question about the apartment, but how long can I keep doing that?”

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In the eastern city of Nanchang, a road divides “Xinli City,” a development of more than 4,000 apartments, into two parts. On one side is a fully occupied residential tower, surrounded by trees. On the other hand, row after row of unfinished concrete structures, without paint, no windows – and no sign of progress.

Andie Cao, a sales representative in her 20s, has an apartment on the wrong side. Every time he sees a finished building, he sees the life that has been promised.

Cao bought a three-bedroom apartment in 2019 for $203,000. It’s expensive, but she and her husband just had a baby and are thinking of having another. He is pleased that the developer’s plans for the large apartment complex include a kindergarten and an elementary school.

Her apartment is scheduled to be completed in November 2021, just in time for her son to start Kindergarten. But the developer, Sinic Holdings Group, stopped work in August 2021 when it ran into financial problems, and has yet to finish building the apartments.

Cao had put down more than $80,000 for the apartment, money saved from hard work in Shanghai. Then in July of last year, they joined other homebuyers across the country in a mortgage payment strike over unfinished homes.

“I won’t pay until they deliver, and I’m willing to pay the fine, but we won’t be exploited and dry.”

The home buyers’ campaign has attracted the attention of the authorities. The police called him from time to time, warning him not to take drastic action. Some of the protesting home buyers have been arrested.

“What is wrong with us to deserve to be treated like this?” she said. “I just don’t understand.”

Ms. Cao and her husband continue to work and pay rent in Shanghai. They don’t think the apartment will ever be finished and can’t imagine trying to buy another house or have a second child.

“I feel like the hard work of the last few years was for nothing.”

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When Tang Chao and his fiancee were looking to buy a house in 2019, they were drawn to Haiyi Changzhou, one of the hottest projects in the northern city of Dalian. The developer promises a high-rise complex with tranquil landscaping and privacy, offering “a good life near the sea.”

The couple bought a two-bedroom apartment for $177,000. To cover the $74,000 in cash he needed, he used his savings and asked his parents to pitch in. Mr. Tang, who works in a restaurant, sells a small place in the countryside.

They signed a contract for an apartment in 2019, and then got a marriage license. They plan to have a party after the apartment is finished and move in together.

“At that time, we told our friends around us that we had bought a house here, we were very proud,” said Mr. Tang, who spoke on the condition that he be identified by his nickname, Chao, because of the political sensitivity of the topic. “I come from the countryside, it feels good to be able to buy an apartment anywhere.”

The apartments were scheduled to be completed last August, but Sunac China Holdings, the project’s developer, has run into financial problems.

In September, owners of more than 2,600 unfinished units in Changzhou’s Haiyi development threatened to stop paying their mortgages.

Mr. Tang said that his wife is tired of waiting for a house that will never end and a new life that will never begin. In November, they filed for divorce. He still pays $550 a month in mortgage payments.

“When I think about the unfinished apartment, it’s like I fell from heaven to hell,” Mr Tang said.

“I have nothing that I want in life – no apartment, no husband.”

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Xu Feng remembers 2019 as a good year. The grocery store in the eastern city of Nanchang that she rents and operates with her husband is doing well. He thought it was time to have his own shop.

He found the perfect place: a 1,000-square-foot, $163,000 space on the first floor of a residential tower. It is part of Xinli City, a giant complex with thousands of apartments where Andie Cao, a service worker, also bought a unit.

Mr. Xu had to sell some things at a loss to pay off about $81,000 and take out a 10-year mortgage. He enrolled his son in a primary school in Nanchang.

Three years later, Xinli City is still unfinished. Mr Xu said he was under financial stress, paying rent for his current business and paying the mortgage. She stopped eating out with friends and cut back on expenses except for her son’s tuition.

“I never thought this would happen to me,” he said. “I’m afraid to have another child. Income and expenses barely break even.”

Frustrated by the delay, Mr. Xu and hundreds of homebuyers have protested several times over the past year.

They gathered outside the local government, in the public square and even hung banners from the top of the building. But so far, nothing has worked and many people have been detained in protest, he said.

In August, Mr. Xu stopped making mortgage payments. This has affected his credit status and forced him to rely on his relatives to take out loans to keep his business afloat. But he says he no longer has hope that the government will step in and help people like him.

“We’ve been through a lot trying to fight for our rights,” he said. “Government officials are just being cautious and doing nothing for the common man.”

The New York Times contacted Sunac China, China Fortune Land Development, Sinic Holdings Group, as well as housing regulators at the municipal, provincial and national levels for comment. No one answered.

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