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Shares of Chinese banks are sliding amid growing market concerns after homebuyers in several cities refuse to pay mortgages as the properties they bought were left unfinished.
An index tracking mainland-listed banks, compiled by Wind Information, is slumping nearly 3% as of 9:43 am local time, making it the worst-performing sector in the A-share market, compared to 0.6% loss for the benchmark Shanghai Composite Index.
In Hong Kong, China Merchants Bank tumbled by as much as over 8%, after sliding nearly 7% one day earlier. Postal Savings Bank of China is falling nearly 4%.
More and more home buyers across China refuse to pay mortgages as the properties they purchased have been left unfinished amid the liquidity crunch in the real estate sector.
As of July 12, home buyers of more than 100 property projects across provinces including Hubei, Henan, Shandong, Jiangxi, Jiangsu, Hunan and Shaanxi had issued statements saying that they refuse to pay mortgage loans as the properties they purchased have been left unfinished, according to a report to The 21st Century Business Herald.
The construction of the projects had been in suspension due to the developers’ liquidity difficulties, which means the home deliveries would be delayed, leaving them not choice but to take actions to safeguard their legitimate rights, the homebuyers said. Read more …