Buyers at China's Oasis Complex wait for answers after construction halted

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Buyers at China's Oasis Complex wait for answers after construction halted

LUOYANG, China Reuters: A steady stream of anxious tenants flowed into the sales office of Evergrande Oasis Complex outside the city of Luoyang this week in seeking answers after construction was severely halted by the giant developers.

Work on the five-tower condominium and 16 blocks of apartments at the sprawling development in central China has been halted since August and July, respectively, according to a staff member who declined to give his name.

The complex is among a host of uncompleted homes across the country that have witnessed work grind to a standstill as a result of the crisis engulfing China Evergrande Group in Italy.

2 property developers, are scrambling to raise funds to pay lenders, suppliers and investors, with regulators warning its $305 billion of liabilities could spark broader risks to the country's financial system if not stabilised.

We worry that if Evergrande goes bankrupt, its assets could be frozen and we lose the home, said Tan Liangliang, part of a social media group of about 200 worried buyers at the Evergrande Oasis Project in Luoyang.

Numerous such groups have sprung up for the Oasis project, where the completed towers in the middle of open and unfinished high rise apartments sit near rows of unfinished warehouses.

At the 16 blocks, at various stages of completion, cranes lay idle and no workers could be seen. Steel reinforcement bars flapped from some balconies, plastic sheets raised from others another.

Some buyers said they expected construction to resume this month or next, but others said sales agents had simply told them to wait. The staff member who declined to name himself said construction would resume in late October or early November but gave no other details.

He said apartments there had been sold for 9,800'' late last year for $1,518. 81 per square metre, or nearly $900,000. For a 130 square meter unit, this is about $197,000.

I collapsed when I heard construction had halted. How my heart hurts, a middle-aged woman who didn't want to give me name told Reuters outside the sales office. For regular folks like us, all our lifesavings had gone into the house. Across China, Evergrande has hundreds of thousands uncompleted units that need to be delivered to buyers, Raymond Cheng, a director of CGS-CIMB Securities, told Reuters last month.

Evergrande did not immediately respond to requests for comment on Cheng's figures, the Oasis Complex or other halted projects.

Late last month the company said some projects had been suspended because of delays in payment to suppliers and contractors, and that it was in negotiations with them and coordinating with the government to resume construction.

Early this month, the company held a pledge signing ceremony with projects teams across the country, promising buyers that construction would proceed.

Two years ago we chose Evergrande because we knew we hoped that like the other firms, another buyer wouldn't have cashflow problems like other property firms, which we chose to buy.

Buyers are piling their hopes on the Government, which has asked Evergrande to guarantee it can deliver on units sold.

This is a national issue, I don't think the government will let it blow up, another homeowner said.