In unfinished Evergrande apartments in central China, buyers search for answers

LUOYANG, China, September 17 (Reuters) – A constant stream of anxious apartment buyers have flocked to the sales office at the Evergrande Oasis complex outside the city of Luoyang this week, seeking answers after the shutdown of construction by the severe cash shortage of the giant developer.

Work on the five-tower condominium and 16 apartment blocks in the vast central China development have been halted since August and July, respectively, according to a staff member who declined to give her name.

The complex is one of a host of unfinished homes across the country that have seen work stop due to the crisis that engulfed China Evergrande Group

Evergrande, the country’s second-largest real estate developer, is pushing to raise funds to pay lenders, suppliers and investors, with regulators warning that its $ 305 billion in liabilities could pose greater risks to the country’s financial system if they are not stabilized.

“We are concerned that if Evergrande goes bankrupt, its assets could be frozen and we would lose the house,” said Tan Liangliang, who is part of a social media group of about 200 worried buyers of the Evergrande Oasis project in Luoyang.

Many such groups have sprung up for the Oasis Project, where unfinished towers stand next to rows of completed and occupied high-rise apartments.

Of the 16 blocks, at various stages of completion, the cranes were unused and no workers were visible. Sheets of plastic slammed from some balconies, steel rebars protruded from others.

Some buyers said they expected construction to resume this month or next, but others said sales agents simply told them to wait. The staff member who refused to identify himself said construction would resume in late October or early November, but gave no further details.

He said the apartments were sold there late last year for 9,800 yuan ($ 1,518.81) per square meter, or about $ 197,000 for a 130 square meter unit.

An unfinished residential building is pictured through a construction site door at Evergrande Oasis, a real estate complex developed by Evergrande Group, in Luoyang, China on September 16, 2021. REUTERS / Carlos Garcia Rawlins

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“I collapsed when I heard that construction had stopped. My heart hurts,” a middle-aged woman who refused to give her name outside the sales office told Reuters. “For ordinary people like us, all of our savings had gone into the house.”

Across China, Evergrande has hundreds of thousands of unfinished units due for delivery to buyers, Raymond Cheng, chief executive of CGS-CIMB Securities, told Reuters last month.

Evergrande did not immediately respond to requests for comment on Cheng’s numbers, the Oasis complex, or other stopped projects.

At the end of last month, the company said some projects had been put on hold due to late payments to suppliers and contractors, and that it was in negotiations with them and coordinating with the government to resume construction.

Earlier this month, he held a pledge-signing ceremony with project teams across the country, promising buyers that construction would continue.

“Two years ago when we were deciding which property to buy, we chose Evergrande because we believed that being such a big brand wouldn’t have cash flow issues like other real estate companies,” said another buyer. , refusing to give his name.

Buyers are placing their hopes on the government, which has asked Evergrande to guarantee it will be able to deliver the units sold.

“It’s a national problem, I don’t think the government will let it explode,” said another owner.

($ 1 = 6.4524 yuan Chinese renminbi)

Reporting by Yew Lun Tian; Additional reporting by Clare Jim in Hong Kong Editing by Tony Munroe and Pravin Char

Our standards: Thomson Reuters Trust Principles.

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