Construction cranes stand idle in China’s Yunnan Province, on the easternmost edge of the Himalayas. Building has ground to a halt on Hainan, off the coast of Vietnam, and up in Heilongjiang, along the Russian border.

Across China, tens of millions of square feet of unfinished apartment buildings — the legacy of a real estate boom gone awry in 2021 — are derailing countless dreams of owning a home.

In a country where private homeownership was only legalized two decades ago, ordinary Chinese are discovering how quickly fortunes can turn in the housing market. Creeping price declines and plummeting sales in recent months have called into question the way freewheeling property developers have financed, built and marketed homes to the masses.

No developer encapsulates the running travails quite like China Evergrande Group, the giant conglomerate that’s now in default and groaning under more than $300 billion in liabilities. But many smaller developers also followed Evergrande’s familiar strategy: borrow heavily, build aggressively — and make buyers pay in full upfront, sometimes before ground is even broken. Until the bottom fell out, nearly nine out of every 10 homes in China were “pre-sold,” according to Hongta Securities Co. Buyer protections commonly used abroad, such as escrow accounts and installment payments, have tended to be weak. 

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