China’s Homeowners Hasten Mortgage Repayments as Economic Uncertainty Looms

Chinese property owners are hastening to settle their home loans ahead of schedule due to the bleak economic forecast. Concerns over possible job losses and the scarcity of lucrative investment opportunities are prompting homeowners to quickly pay off their home loans and mortgages.

Li Wen, who serves as the HR director for a government-owned company in Nanchang, Jiangxi province, used her annual work bonus to pay off an existing debt of 200,000 yuan (equivalent to US$28,170) on her mortgage in January, earlier than expected.

The individual, who is 36 years old, has been diligently paying off her debts, which amount to 600,000 yuan, ahead of schedule for several years. This continued even when the interest rate was lowered to 4.3 per cent from its initial 5.39 per cent after several decreases in the rate over the previous year.

"Putting my money in banks doesn't benefit me," claimed Li. "The rates for deposits are significantly low, and there aren't any appealing options for high-yield investments."

"I prefer to settle my debts sooner to avoid the interest expenses, particularly now that salary reductions and layoffs are becoming more frequent."

Many homeowners in China, including Li, who invested in the booming housing market with the expectation of increased value, are now worried as property prices begin to fall.