On 30 June 2022, purchasers of Hengda Longting apartments in Jingdezhen City, Jiangxi Province, issued a public notification of intending to stop paying home loans (qiangzhi tingdai gaozhi shu). The notification represented over 900 purchasers of the apartments. It disclosed that building work had stopped since 1 June and construction workers had been paid only twice in 2022; it demanded that construction work be fully resumed by 20 October, otherwise home-loan payments would be stopped until construction work resumed.

Remarkably, but understandably, the notification was addressed to the Jingdezhen City government, the local Urban and Rural Residential Housing Construction Bureau, the local bureau of the China Banking Regulatory Commission and all banks that have provided loans. The notification was quickly followed by many other similar ones all around the country. Within two weeks, notifications issued by purchaser groups against 101 building projects in 47 cities were recorded. This phenomenon was dubbed the ‘stop-paying-the-loans wave’ (ting dai chao).

The fast spread of the purchasers’ actions is a reaction to systemic problems in China’s residential housing mortgages and, more widely, in land and housing developments.

In China, purchasing an apartment from a developer usually means purchasing off-plan (advance sale). Article 45 of China’s Urban Real Estate Administration Law 1994 prescribes that advance sales can commence after property developers have paid the full price for the land, obtained relevant licences for the construction, invested at least 25% of the total budget on the construction and obtained a licence for the advance sale; the funds from the sales must be used in the construction of the relevant project.