Cause and Impacts of Interrupted Fund Supply of Real Estates in China: A Comparative Analysis

Abstract

In recent years, a trend of Interrupted fund supply of real estates, which was defined as a ‘Loan cut-off tide’, has been inspired in China among homebuyer as plenty of negative news of Chinese real estate’s industry due to the COVID-19 since 2020. As a matter of fact, a ‘Loan cut-off tide’ referred to the phenomenon that homebuyer refuse to pay for their mortgage loans. With this in mind, this paper explores the causes of ‘Loan cut-off tide’ based on theoretical analysis and data analysis and compares the situation in China during the occurrence of ‘Loan cut-off tide’ with the situation of 1980s Japanese Economic Bubbles and Global Subprime Mortgage Crisis in early 21st century. According to the analysis, the inherit reasons are given and corresponding suggestions to handle the issue are presented and demonstrated. These results shed light on guiding further exploration of interrupted fund supply impacts on real estate industry.