August 28 and 30, China is facing a housing crisis where homeowners and the home market are showing no growth compared to last year’s 1.4% growth margin in the real estate sector due to a lack of homes left unbuilt in recent events.

The companies behind the supposed construction of the prebuilt houses aren’t holding up their end of the bargain. Many companies are supposed to have the development of homes already underway, but that isn’t the case, leaving 90 percent of homes not built, resulting in both companies and buyers in debt.

Hui Ka Yan, the founder and owner of Evergrande, borrowed money from home buyers in large amounts. This practice led Hui Ka Yan to stop construction because of the debt it caused. 

Previously mentioned practices eventually led to an escalating problem involving debt that would result in home buyers taking action by not repaying their mortgages. Homeowners are boycotting Evergrande and other companies because of a lack of progress in home construction. 

As a result, the housing market has significantly decreased compared to previous years, which has affected China and its GDP in the home sector since the house market is responsible for more than a quarter of China’s economy.

Due to the extensive amounts of money borrowed and overbuilding, the never-ending real estate boom that China was once experiencing has stopped. The practices of Chinese real estate companies like Evergrande have become liable, which has caused an economic crisis for China.