Home buyers in Tianjin, China have been waiting 8 years for their homes.

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

As is common in China, a residential complex in Tianjin sold the apartments before they were even completed. The promise was that they would be ready by 2019, but most are still unfinished, according to five homebuyers who spoke to CNBC by phone but requested anonymity for fear of retaliation. Buyers are people who have paid either in full upfront or in small installments. Their concerns are just one example of broader problems that persist in some of China’s real estate sectors.

After initial attempts to get money back or gather information about real estate purchases, some buyers said police showed up at their home, sometimes in the middle of the night.

“I feel like I’ve been lied to all this time,” one shopper said in Chinese translated by CNBC.

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

Some buyers said they bought the apartments as a place for their parents to retire or for their children to attend school nearby. During the eight-year wait to move, one buyer said one of their parents died while waiting for a new home, and another said their child grew up and found another school instead.

The developer in the case, Zhuoda Yidu, late last month asked homebuyers to approve a settlement, a copy of which was seen by CNBC.

The document states that the apartments could be completed in 2025 or 2026 if buyers agree to pay all outstanding balances on the property purchase, as well as other costs determined by the developer, within the next few weeks.

The proposal did not offer an alternative and said the properties should be valued at prices existing before the market downturn, or approximately double or more than current levels, according to brokerage-quoted prices. Not to mention eight years of wear and tear and possible disruption to families’ life plans.

“The down payment money came from my dad,” one buyer said of the home purchased in 2016. “I can’t tell him it’s not finished yet. During Covid I told him there were delays. Now there is no more Covid and there are no excuses.”

In addition to paying for this apartment in full, this buyer is still paying a monthly mortgage of about 2,800 yuan for a second apartment in the same complex, which was intended for a relative.

The situation has fueled the feeling that no matter how much money is spent, buyers will never get their homes, one of the sources said. The person noted that in a group chat of about 500 buyers on social networks, approximately 90% rejected the developer’s offer.

Zhuoda Yidu was unavailable for comment despite CNBC’s numerous attempts to call and email the company and its representatives. A lawyer handling Zhuoda Yidu’s bankruptcy and liquidation case referred CNBC to Tianjin’s Wuqing District People’s Court for comment. The court did not respond to CNBC.

Wang said this was the first time she had heard that homebuyers were having to pay more to get completed apartments.

She said that before the Covid-19 pandemic, there were sporadic cases of delayed deliveries, especially in cities such as Tianjin, where property construction surged in 2014 and 2015. She said at the time, local officials and developers were usually quick to find a solution. since it required a lot of money for the average family.

Interest in Tianjin and other areas around Beijing had surged even before the pandemic as people working in China’s capital sought more affordable housing options at a time when prices were near their peak.

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

But Wang noted an increase in delivery delays since Covid as developers struggled to continue work, leading to a “systemic problem”.

China’s top leaders said at a meeting in late April that they would continue to work on ensure the delivery of houses and protect the interests of home buyers.

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

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

In a sign of problems with the project early on, the official Tianjin Daily reported back in March 2017 that the same Xiyu Garden project was being built by Zhuoda Yidu Investment in Tianjin’s Wuqing District. violated city real estate rules by collecting money from buyers without obtaining a commercial home sales license. The report said local authorities imposed fines and ordered the situation to be corrected. Records obtained through the Qichacha business database showed that Zhuoda Yidu did not receive licenses to sell commercial housing until August 2018, although it received construction permits for part of the project in 2016.

One home buyer confirmed to CNBC that after the incident described in the Tianjin Daily report, buyers were able to obtain a purchase certificate.

Apartment buyers in Tianjin interviewed for this article said they were aware of unsuccessful attempts to have the project included on the central government’s list of unfinished houses (which typically guaranteed financing until completion), although it is unclear whether this was related to the certified status. Some saw the latest proposed settlement as a response to changes in central policy, as it was a path to completion rather than leaving the project hanging.

The property sector’s woes have also affected the finances of local governments, which once generated significant revenues from selling land to developers.

Among China’s high-income cities, Tianjin ranks one of the highest levels of debt in relation to GDPThis was reported by S&P Global Ratings.

For many households, real estate makes up the majority of their wealth, often as a result of grandparents and relatives pooling their savings.

One home buyer invested 190,000 yuan to buy a 90-square-meter three-room apartment for 700,000 yuan in an unfinished residential complex in Tianjin.

This is savings over several years. The average per capita disposable income in 2023 for Beijing city residents was 88,650 yuanAnd 51,271 yuan in Tianjin, reflecting a much lower cost of living.

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