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Once, Hu Haoqi's dreamed about moving out of the two-bedroom apartment he shares with two of his friends and into an apartment of his own. An interior designer by profession, he even sketched out what his bedroom would look like and carved out spaces in his dream home for house plants and a pet cat. He doesn't want that anymore. Ever since <keyword id="11893589" type="UNKNOWN" weightage="100" keywordseo="news" source="Orion">news</keyword> of <keyword id="11893545" type="UNKNOWN" weightage="60" keywordseo="evergrande" source="Orion">Evergrande</keyword> defaulting on its debts broke last month, Hu, 32, who works in Guangzhou, has spent a lot of free time "doom scrolling" through housing-related threads on Weibo, the country's Twitter-like platform."It is extremely scary to read stories of people my age who put down deposits for Evergrande apartments, thinking they'd be able to move into a home of their own in five or six years," Hu told Insider. What scares Hu most are videos on Douyin, China's version of TikTok, that feature abandoned "ghost cities" and unfinished buildings. "I've seen accounts of people who dumped their savings over the last decade and a half into those deposits, and now they don't know if the apartment building's ever going to be fully built," Hu said. "I don't want that to happen to me, so for now, I'm just going to keep renting and saving up." He's not alone.There are more than <a href="https://therealdeal.com/2018/02/18/china-has-5x-the-number-of-millennials-than-the-u-s">400 million millennials amid China's population of 1.3 billion people.</a> Many of them rely on incurring debt to enter the housing market. <a href="https://asia.nikkei.com/Spotlight/Caixin/Property-prices-climb-at-graowing-rate-in-China-s-biggest-cities">A basic apartment</a> in a major "tier one" city like Beijing <a href="https://www.bloomberg.com/news/articles/2021-06-23/derelict-homes-near-good-schools-are-china-s-top-real-estate-buy">can cost as much as $1 million,</a> far beyond what younger millennials can afford without borrowing cash from their parents or financial institutions. But now, the growing crisis of property giant Evergrande has many reevaluating their goals. Hu is one of the five millennials that Insider spoke to who said Evergrande's continuing debt crunch is making them think long and hard before making any major decisions, be it in their investments or when buying <keyword id="11893295" type="UNKNOWN" weightage="60" keywordseo="real-estate" source="Orion">real estate</keyword>. <h2>Chinese millennials are getting cold feet when thinking of buying homes </h2><div type="image" title="construction worker in Shenzen on girders" height="988" width="1317" msid="86831438" hostid="261"></div>Chinese property developer Evergrande is now the world's most indebted company and faces more than <a href="https://markets.businessinsider.com/news/stocks/evergrande-stock-market-selloff-what-to-know-debt-crisis-china-2021-9">$300 billion in liabilities.</a> It has <a href="https://www.nytimes.com/2021/09/19/business/china-evergrande-debt-protests.html">800 development projects across China,</a> many of which were forced to pause construction this summer because of the debt crisis across its <a href="https://www.businessinsider.com/china-negotiates-state-firm-purchase-of-evergrande-assets-2021-9">real estate</a> and <a href="https://www.businessinsider.com/evergrande-investors-confronting-staff-weibo-videos-2021-9">wealth management</a> arms. Evergrande's impending collapse has also sparked fears of a <a href="https://www.businessinsider.com/evergrande-crisis-stock-market-crash-strategists-investing-strategy-buy-dip-2021-9">contagion spreading to the rest of the country's real estate market</a>, including rival property developers like Fantasia, which <a href="https://www.businessinsider.com/chinese-developer-fantasia-misses-200-million-repayment-real-estate-woes-2021-10">missed a $206 million repayment deadline this week</a>.The potential scenario that other developers could be embroiled in something similar to the Evergrande crisis prompted banking executive Taniia Dai and her IT specialist husband Dai Yiheng, who are both in their late 20s, to put the breaks on closing on a home. The Dais, who married this January, currently rent a home in the southern Chinese province of Zhejiang. They were initially planning to put down a deposit for a property by developer <a href="https://en.bgy.com.cn/">Country Garden</a>, but told Insider that they're "thinking twice.""I don't want to become one of the people anxiously checking Weibo to see if work is re-starting on my apartment," Dai Yiheng told Insider."One alternative is for us to buy an apartment on the resale market, or to get a newly built one, but that will mean coming up with more money upfront. We'll have to do our sums, but for now, these plans to own our own house are being put on hold," Taniia Dai said.The average salary of a millennial in China is about $1,817 a month, or $21,804 annually, according to a 2017 <a href="https://assets.kpmg/content/dam/kpmg/cn/pdf/en/2017/12/chinas-connected-consumers-the-rise-of-the-millennials.pdf">KPMG report</a>. And per Insider's <a href="https://www.insider.com/meet-the-typical-chinese-millennial-income-housing-ambitions-2021-7#for-many-the-image-of-success-is-tied-to-material-goods-like-cars-and-homes-7">report this July on the lives of typical millennials in China</a>, many millennials go into debt just to be able to afford homes, which makes signing on to get an apartment a major, life-changing decision.So it's no wonder why the prospect of going into debt and ending up with no home does not interest Yang Kai, 26, of Beijing.Yang, who plans to marry his college girlfriend at the end of this year, told Insider that the "instability" caused by the Evergrande crisis is making them reconsider purchasing a home at all - and, by extension, having a child. "When we get married, we'll be living with my family in Beijing. It's a small apartment, and there won't be room for a child," Yang told Insider.That can't sit well with the Chinese government, whose panic over declining birth rate numbers has led to a reckoning with the country's previous one-child policy and the creation of <a href="https://www.insider.com/chinas-3-child-policy-wont-work-heres-why-2021-6">new policies</a> aimed at encouraging people to have more children."We've agreed that now is not the time for us to put our life savings into an apartment that might not ever end up getting built, only to go into debt with a housing loan on top of that," he added.<h2>Experts say the sight of half-built homes and ghost towns of unfinished projects will spook home buyers </h2><div type="image" title="Evergrande" height="2164" width="2885" msid="86831441" hostid="261"></div>Maggie Hu, an assistant professor of real estate and finance at the Chinese University of Hong Kong, told Insider that the sight of half-built homes has likely scared off many investors and home buyers - and reduced their confidence not only in Evergrande but other Chinese property developers. "The number of real-estate transactions will further decrease because people will temporarily hold off their apartment purchases. The de-leveraging and debt crises in the housing market will certainly have a chilling and cooling effect on China's real estate," Hu told Insider. Kenneth Rogoff, a professor of economics and public policy at Harvard University, told Insider that the Chinese government's ability to deal with debt problems may help them to mitigate the immediate costs of a housing crisis, such as half-built apartments in partially-constructed ghost towns. "(China's) advantage owes much to being able to short-cut the niceties of Western legal and political systems in reaching rapid resolution of debt crises that can drag out for years," Rogoff said.In 2014, for instance, China addressed a housing crisis by indirectly bailing out property developers, <a href="https://www.businessinsider.com/reviews/out?u=https%3A%2F%2Fwww.wsj.com%2Farticles%2Fevergrande-is-only-the-latest-in-a-chain-of-chinese-debt-crises-11632411818">Wall Street Journal</a> reported. One of the methods included the government nudging state-controlled banks to pay homeowners cash to upgrade to new apartments, which helped to boost the real estate market. Simultaneously, the Chinese government shuffled debt from property developers to itself, then refinanced the off-balance-sheet debt held by local governments through a new, government-backed bond market.He added, however, that the Chinese government might face the challenge after years of building properties at break-neck speeds of getting diminishing returns to any sort of real estate <keyword id="6355120" type="UNKNOWN" weightage="60" keywordseo="investment" source="Orion">investment</keyword>."The existing Chinese housing stock, in terms of square meters per person, is now comparable to many wealthy economies such as the UK, Germany, France. While the quality of the buildings might be lower, the model of relying so much on real estate as a form of investment is unsustainable," Rogoff added. <h2>Millennials are also pausing on investing in bonds and other financial products</h2><div type="image" title="evergrande china" height="3553" width="4738" msid="86831442" hostid="261"></div>Chinese millennials are also feeling antsy about investing. Mu Yi Qian, 28, told Insider that he has been reevaluating his financial portfolio lately amid the volatile situation on the Chinese stock market. The South China Morning Post reported this April, in particular, that Chinese stocks <a href="https://www.scmp.com/business/china-business/article/3126306/chinas-unloved-stocks-2-cent-away-bearish-trap-fed-policy?module=inline&amp;pgtype=articleicle">were hitting a slump</a>, with its <a href="https://www.scmp.com/comment/opinion/article/3128384/why-chinas-share-market-such-volatile-bumpy-ride">markets underperforming in the first and second quarters</a>. Mu highlighted as well how the Evergrande crisis had exposed how risky it was to funnel cash into products like Evergrande Wealth's wealth management products.<a href="https://asia.nikkei.com/Spotlight/Caixin/China-slow-to-overhaul-3.9tn-bank-wealth-management-sector">Wealth management products are risky, uninsured investment products</a> sold by Chinese banks and financial institutions that offer sky-high interest rates. However, these investments have been <a href="https://www.nytimes.com/2016/08/13/business/international/murky-investments-pose-china-risk.html">criticized for having opaque terms</a>, with investors not necessarily being aware of the projects their money is going into - and by extension, how the returns will be secured, or how well their investments are performing.Evergrande <a href="https://www.reuters.com/world/china/evergrande-begins-repaying-investors-with-discounted-properties-bloomberg-news-2021-09-19/">is now attempting to repay those who invested in its wealth management products with discounted real estate.</a> It is estimated that more than 80,000 people - <a href="https://www.aljazeera.com/economy/2021/9/22/evergrande-turned-to-employees-clients-suppliers-for-cash">including Evergrande staff and their friends and families</a> - hold around <a href="https://markets.businessinsider.com/news/stocks/evergrande-retail-investors-stock-price-wealth-management-products-china-shenzhen-2021-09">$6 billion worth of the company's wealth management products</a>. "It wasn't shocking to me that Evergrande halted trading on its shares, but it seems like a risky move to make any big investments at this time," Mu said. Mu, a Shandong-based architect who describes himself as a "stock market enthusiast," added that he has been observing the market, concluding that "this year is not the year to go all-in."He said he had held back on buying stock in other Chinese property developers, despite advice from his friends that investing in Evergrande's rivals now might be a good idea. "Some people see a lot of opportunity in times of crisis, but I'm not one of them," Mu said.Meanwhile, Zhuang Jingrui, 33, who works in a fashion company in Beijing, told Insider that she was planning to buy into a <a href="https://asia.nikkei.com/Spotlight/Caixin/China-slow-to-overhaul-3.9tn-bank-wealth-management-sector">high-risk, high-return wealth management product</a> from one of her college classmates. But she was "put off" and got nervous about investing in anything at all after <a href="https://www.businessinsider.com/evergrande-investors-confronting-staff-weibo-videos-2021-9">seeing videos online of desperate Evergrande Wealth investors being left high and dry. </a>"My college roommate was telling me that I could earn enough from my investments to buy a car in just two years if I just invested the savings I earned within the last year. Now, I'm starting to think that this all seems like a scam," Zhuang told Insider. <h2>The Evergrande crisis might cool off China's investment market, but not for long: experts</h2><div type="image" title="Hong Kong Stock Exchange" height="892" width="1189" msid="86831443" hostid="261"></div>Experts told Insider that whether or not China will see a lasting trend of investment hesitancy will largely hinge on how the Evergrande crisis is handled from here on."Investment hesitancy will depend on how the default is handled, and to what extent small investors are shielded by the government, if at all," said Robert Carnell, head of research and chief economist at ING Bank in Singapore. "Some 'haircuts' can be expected, as the government will not want to give the impression that these investments are risk-free," Carnell added. "So there will be some losses and an appropriate response might well be that householders are more choosy or hesitant before investing, and look at more than just yield." As for wealth management products, Carnell told Insider that it might be harder for firms to sell wealth management products in the way that Evergrande did."There may well be more reluctance on the part of householders to invest in such products," Carnell told Insider. "A lot will depend on how Evergrande is restructured, and who ultimately ends up holding these liabilities." Chen Zhiwu, director of the <keyword id="11902482" type="UNKNOWN" weightage="60" keywordseo="asia" source="Orion">Asia</keyword> Global Institute and a finance professor at the University of Hong Kong, said Evergrande is unlikely to have a lasting, direct impact on investors' attitudes toward corporate bonds."Evergrande is affecting the bonds and stocks issued by other similar companies. But, given that the panic caused by the Evergrande story will soon be contained, many investors will forget this episode sooner than we would like," Chen said.But that ultimately might not be a good thing. "This is why we want to remind regulators of the moral hazards and consequences of their intervention: if they intervene too much and too often, no investor would learn any lesson about risk management," he said. For now, millennials like Hu, the interior designer, are hanging on tight to their wallets and hoping the storm will pass. "Everyone suffers when investments go awry and the housing market looks this risky," Hu told Insider. "I'm hoping that one day, I'll be able to buy my home and happily invest in stocks and shares. But right now, I'm just going to keep watching and waiting to see what happens next."

The Evergrande crisis has some Chinese millennials 'doom-scrolling' about financial collapse and questioning whether they'll ever be able to buy their own homes

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The Evergrande crisis has some Chinese millennials 'doom-scrolling' about financial collapse and questioning whether they'll ever be able to buy their own homes

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