Real estate is long known as the backbone of China’s economy. July statistics for its crippled real estate market is gloomy again, following a nationwide movement that destroyed home buying confidence. 

According to a July 31 report by Chinese real-estate data provider CRIC, home sales in the country shrank to roughly 77.6 billion dollars in July. It is a 28.6% decrease from the month prior and a 39.7% year-on-year slump. 

This is a redirection from the two previous consecutive months. China was enjoying two months of alleviation and recovery in month-to-month sales growth after COVID-19 restrictions were reduced and stimulus programs started to take effect.

Although July would typically be the month of lowered purchases for real estate,  the Wall Street Journal noted that the numbers for this year could be closely linked to China’s recent mortgage boycott. 

By the end of June, homeowners started to demand a waiver of mortgage responsibility over stalemate real estate projects. Stress from the faltering economy and employment dampened their willingness to keep paying for property that is nowhere near to materialize. 

Based on comments of homebuyers from GitHub, as of Friday, the movement gathered hundreds of buyers from around 320 projects across China. Now a national crisis, the Financial Times says China is planning to lend debt-ridden real estate developers 148 billion dollars to complete their pre-sold unfinished apartment buildings.

Still, one banker who declined to be named was skeptical, saying, “Many unfinished projects have zero or negative value after taking into account their existing debts. We are not going to touch such projects even if it is politically correct to do so.”

According to the Journal, in the 30 areas that Chinese real-estate data provider CRIC considered to have been heavily affected by the mortgage strike, the week ended July 10 saw a 12% decline in new home sales from the week before. It slipped 41% further in the week ended July 17.

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