China is trying to cool its costly and dangerously debt-ridden housing market, where high prices and go-go levels of borrowing and spending are increasingly .

But as the troubles of a major property developer and its $300 billion mountain of debt drive a government effort to contain the peril, Beijing risks hurting a major driver of its crucial economic growth engine: homebuyers like He Qiang.

He was so optimistic about property in China that he bought an apartment from that property developer, China Evergrande Group, then became a real estate agent himself, selling the company’s apartments to hundreds of other families.

He is much more pessimistic these days. He, who is from the southern city of Yueyang, has yet to move into his apartment because Evergrande has stopped construction. So many other people are nervous about buying homes, he said, that he’s considering going back to selling cars.

The real estate boom that once attracted young professionals like He is experiencing a dramatic overhaul. At one point, buying was so frenzied that properties would sell out within minutes of being offered. Speculation sent prices soaring.

We are indeed seeing a very serious slowdown in the property market, with falling prices, sales and construction activity, and this is likely to drag down economic growth in the next couple of quarters,” said Arthur Kroeber, managing director of Gavekal Dragonomics, an independent economic research firm.

The company’s troubles have elicited recent comments from central bankers around the world and even the U.S. secretary of state, who urged China to “act responsibly” in handling Evergrande’s future.

China’s 100 biggest real estate companies are expected to report that sales in September plummeted by more than a third compared with a year earlier, according to China Real Estate Information Corp. an industry data provider.

A group of homebuyers on a forum in Guangzhou said they learned that Evergrande had placed the money from their down payments in a private bank account and not the one stipulated by the local authority and monitored closely.

He Qiang is still waiting to hear from Evergrande about his apartment. Although the developer has not sent him a notice of delay, he can see that construction on his building stopped several months ago, and has had to reconsider his plans to get married in May.


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