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BIZCHINA> Review & Analysis
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Speculators' housing ruse
(China Daily)
Updated: 2008-08-02 10:03 Some house buyers in Shenzhen, which is seeing a property slump, have stopped paying their monthly installments as new price-cuts there make it possible for them to buy a new house with the installments they are not paying. Some experts have reminded banks to take note of credit risks. This warning is constantly used by real estate developers to call for policy support from the government to stabilize housing prices. In this way, they safeguard their interests. But in fact the dispute is nothing more than some investors not wanting to pay for their homes. While housing developers are waiting to benefit from possible policy intervention by the government, they hope this intervention will push up housing prices. First of all, the dispute itself is meaningless as it has nothing to do with the interests of the general public. Stop paying installments in order to stem further personal losses means bad credit and the risk of foreclosure. Furthermore, banks only offer financing to house buyers based on comprehensive risk-control measures. In fact, housing developers are taking advantage of the public debate to defend their interests. They do not actually care about the installments as they have already got their money. What they hope is the dispute may help raise public concern and thus increase their chances of gaining further profit. It is simply public opinion manipulators trying to make a fast buck. The problem only relates to house buyers, developers and banks, rather than the whole society. Not paying monthly installments will not have a great impact on the entire housing market. Shenzhen Banking Regulatory Bureau statistics show both the balance and percentage of non-performing loans have been on the decrease. So the rumors do not hold water. (For more biz stories, please visit Industries)
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