Unfinished Buildings in China Put Trillions of Chinese Bank Loans at Risk ~ August 29, 2022

“Falling sales drive down developers’ operating cash flows and dent the market sentiment, jeopardizing property developers’ ability to access the debt and banking market and significantly affecting their financing cash flow. Home buyers would also delay their purchase and opt for a wait-and-see approach. As a result, property sales will fall further, and [property] prices will also drop.”

For example, Skyfame Realty, a private Chinese real estate developer, had all its bonds suspended on the Hong Kong Stock Exchange on June 28 after it failed to pay off a secured loan. Before disclosing the default, the firm revealed on June 16 that it was under “unprecedented liquidity pressure.”

Evergrande, the second largest property developer in China by sales, was ranked 122nd in the 2021 Fortune Global 500. However, that same year it defaulted, shocking the market as the world’s most indebted real estate company.

Unfinished Buildings in China Put Trillions of Chinese Bank Loans at Risk ~ August 29, 2022 – Rose Rambles…