Like thousands of others in China, they have poured their savings into buying a presale apartment — only to see the developer fall into financial difficulties and halt construction on the project. Presales have become standard practice in China. In 2021, 87% of new homes in the country were sold while still under construction, up from 63% in 2005. Most buyers pay for their apartments months — or even years — before they are finished.
The model has supercharged China’s property market, enabling developers to finance massive amounts of construction. But now, the real estate sector is facing a financial crunch. Across the country, developers are struggling to service eye-watering debts, and bringing projects to an abrupt standstill.