House buyers in China’s Tianjin have been waiting 8 years for their homes

BEIJING — A group of around 1,500 homebuyers in the Chinese city of Tianjin, near Beijing, have yet to see — let alone move into to — the apartments they said they paid for about eight years ago.

As is common in China, the apartment complex in Tianjin sold the units before they were completed. The promise was that they would be ready by 2019, but the majority are still unfinished, according to five of the homebuyers, who spoke to CNBC via telephone but requested anonymity out of fear of retaliation. The buyers are a mix of people who paid in full upfront but also in smaller installments. Their concerns are just one example of the wider challenges that persist in pockets of China’s property sector.

Following early efforts to recoup their money or to garner information about their property purchases, a few buyers said police visited their homes, sometimes in the middle of the night.

“I feel like I’ve been tricked this whole time,” one buyer said in Mandarin, translated by CNBC.

“My only request is that I can return the house and get my money back,” the buyer said. “Even if I am able to get the house, I will feel bad.”

Some buyers said they had bought the apartments as a place for their parents to retire, or for their children to attend school nearby. In the eight years of waiting to move in, one buyer said one of their parents had died while waiting for the new home, and another said their child had grown up and found another school instead.

Interest in Tianjin and other areas surrounding Beijing surged prior to the pandemic as people working in China’s capital city looked for more affordable housing options at a time when prices were near a peak.

Beyond China’s recent real estate woes, the homebuyers’ dilemma has its roots in a household registration system — called hukou — which dictates where one’s children can attend public school, among other benefits. Cities such as Tianjin have also used hukou policies to attract new residents.

But Wang noted an increase in delivery delays after Covid, as developers struggled to keep operating, resulting in a “systemic problem.”

China’s top leadership said at a meeting in late April they would continue to work to ensure the delivery of homes and protect homebuyers’ interests.

China’s Ministry of Housing and Urban-Rural Development and its local unit in Tianjin’s Wuqing district did not provide a comment when contacted by CNBC about this story.

The developer Zhuoda is far from being one of China’s largest. Some of the homebuyers who spoke to CNBC said that after making initial payments, they found out the property in question was not necessarily a certified project.

In a sign of issues with the project early on, the official “Tianjin Daily” newspaper reported back in March 2017 that the same Xiyu Garden project constructed by Zhuoda Yidu Investment in the Wuqing district of Tianjin violated the city’s real estate transaction rules by collecting money from buyers without obtaining a license for commercial housing sales. The report said local authorities imposed penalties and ordered rectification. Records accessed via business database Qichacha showed Zhuoda Yidu didn’t get licenses for commercial housing sales until August 2018, although it had received construction permits for part of the project as early as 2016.

One homebuyer confirmed to CNBC that after the incident described in the Tianjin Daily report, the buyers were able to get a purchase certification.

The buyers of the Tianjin apartments interviewed for this story said they knew of an unsuccessful effort to get the project on the central government’s list of unfinished homes (which would usually guarantee financing until completion), although it was unclear whether that was due to the project’s certified status. Some saw the latest proposed dispute settlement as a response to central policy changes, since it was a path toward finishing construction instead of leaving the project hanging.

The real estate sector’s troubles have also weighed on local government finances, which once generated significant revenue from sales of land to developers.

Among high-income Chinese cities, Tianjin has one of the highest debt levels relative to GDP, according to S&P Global Ratings.

For many households, real estate has accounted for the bulk of their wealth, often the result of grandparents and relatives pooling their savings.

One home buyer sunk 190,000 yuan into what was a 700,000 yuan purchase of a two-bedroom apartment, 90 square meters large, in the unfinished Tianjin apartment complex.

That’s several years’ worth of savings. The average per capita disposable income in 2023 for Beijing city residents was 88,650 yuan, and 51,271 yuan in Tianjin, reflecting the far lower cost of living.

“We don’t have that much money,” the buyer told CNBC. “If we had enough money we would be buying in Beijing.”