BEIJING: China’s banking regulator has urged lenders to extend more credit to real estate developers, as a growing number of homebuyers withhold mortgage payments on unfinished housing projects across 50 cities.

Furious at postponed deliveries of pre-sold homes, unclear delivery times and halted construction, homebuyers were last week reported to have halted payments for already sold units in at least 100 residential projects, according to data from industry groups and analysts.

The boycott has worsened fears of financial contagion in the country’s troubled real estate sector, which is estimated to account for 18-30 percent of GDP and is a key driver of growth in the world’s second-largest economy.

China’s Banking and Regulatory Insurance Commission urged banks to “effectively meet the reasonable financing needs of real estate companies, vigorously support rental housing construction” and support project mergers and acquisitions, a representative said in a state media interview published Sunday.

They were also asked to “do a good job in customer service … abide by contracts, fulfil commitments, and protect the legitimate rights and interests of financial consumers”.

These measures were required to “maintain the stable and orderly operation of the real estate market”, the unnamed official said.

Authorities launched a crackdown on excessive debt in the property sector in 2020, leaving giants like Evergrande and Sunac struggling to make payments and forcing them to renegotiate with creditors as they teetered on the edge of bankruptcy.

Regulators met banks last week to discuss the growing consumer mortgage boycott, Bloomberg News reported, as more major Chinese developers teeter on the brink of default.

The developments come at a time of slowing growth for China and weak property sales, adding to the risk to stability ahead of the Communist Party’s 20th Congress in the autumn, when President Xi Jinping is expected to be given a third term.