8/7/2023 0 Comments China developer defaultLooking ahead, he expects more policy easing of the property sector, as authorities look to boost housing demand. "One thing we can be sure of is that the property sector is struggling," he wrote. That points to a further pullback in new housing projects in the coming months. Meanwhile, developers' land purchases have slumped as they "batten down the hatches" to ride out slowing sales and the constraints on their financing, the economist added. "The Evergrande debacle has probably given homebuyers concerns about whether developers will honour presale commitments," Capital Economics' Senior China Economist Julian Evans-Pritchard said. New home sales have dived in recent weeks and are now 25% below 2019 levels, said research firm Capital Economics in a note on Friday. "A prolonged weakness in bond prices may hit the confidence of the company's borrowers, suppliers, and purchasers." China properties 'struggling': Capital Economics ![]() "Greenland's bond prices have deteriorated sharply again following wider investor concerns over the sector," Fitch wrote. Fitch said it expects the firm's ability to generate cash to slow. It also cited its "impaired" funding access, which will limit its ability to weather the downturn in the property industry. Greenland Holding Preceding Friday's downgrades, S&P on Thursday downgraded Greenland Holding - one of the bigger real estate developers which has prestigious properties in cities such as New York, London and Sydney. Modern Land Fitch also downgraded Modern Land on Friday, citing the developer's move to delay for three months a repayment on a $250 million offshore bond.ģ. Weakening cash generation will also pressure Aoyuan's liquidity as it faces sizable maturities in 2022, despite our expectation that the company can still sort out the repayment under a tighter situation," S&P said.Ģ. ![]() "The company's reduced visibility on revenue growth and continued margin pressure will hinder deleveraging efforts. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Early reports from October show sales activity declining even more sharply, signaling that China's official stance that the contagion from Evergrande's collapse is contained has not eased fears in the country's property markets.Best Debt Consolidation Loans for Bad Credit Sales activity declined sharply last month as well, despite September traditionally being among the most active months for home sales in China, while interest waned significantly in auctions of land held by regional governments - a key source of their revenue, Bloomberg reports. While some analysis found home prices are flat, others determined that prices actually fell month-to-month, which would be the first instance of home price decline since 2015, Bloomberg reports. Home prices in China stalled in September, the first month without growth since the coronavirus-slammed February 2020, Reuters reports. The perspective from homebuyers in the country does not match the party line, however. Official party leadership in China has finally made public statements addressing the real estate market's growing issues, saying that despite some companies facing default risks due to "mismanagement issues," the overall market is still healthy, Reuters reports. holdings, have sought to delay payments or otherwise mitigate their obligations with lenders. Recent bond offerings by Kaisa Group Holdings have dropped steeply in value after a ratings cut, Reuters reports. That follows a similar default by Fantasia Holdings Group earlier in October while other developers, some with U.S. Sinic Holdings Group had its credit rating downgraded to Selective Default by S&P Global Ratings on Tuesday after failing to pay the interest and principal of a $250M bond due Monday, Bloomberg reports. Other Chinese real estate groups are also dealing with sizable defaults. Should the company fail to pay the coupon for the $83M bond due in March, it will officially be in default. ![]() The deal's failure represents another closed avenue for the developer to pay off some of its $305B in debt obligations, the most for any real estate company in the world.Ī small yet significant chunk of that debt faces a key deadline Thursday, when the 30-day grace period for Evergrande to make a payment on a dollar bond expires, Bloomberg reports. China Evergrande Group's debt problems are deepening as the ripple effects from its credit crisis continue to spread in China's real estate sector.Įvergrande's proposed $2.6B sale of a majority stake in its property management arm to Hopson Development Holdings has officially fallen through, The New York Times reports.
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