China - Housing 06 (Nov 21 - Dec 26)

[winston]

'Matchmaking' aims at assets of China's stressed developers

The Guangdong government recently held a "matchmaking" meeting for state-backed developers to buy up distressed assets of debt-laden private peers.

Source: The Standard

https://www.thestandard.com.hk/section- ... developers

[winston]

Property market 'bottoming out'

Average new home prices in China's 70 major cities declined 0.2 percent in December from a month earlier, slower than a 0.3 percent drop in November as marginal easing on financing curbs, and promotions by property developers helped to stabilize demand.

Monthly prices picked up in 15 of 70 cities, up from nine cities that reported price gains in November, data from the National Bureau of Statistics showed.

"The property market is gradually bottoming out with the period of tightest credit over," said Zhang Dawei, chief analyst at property agency Centaline.

First- and second-tier cities will be the first to emerge from the downturn, he said.

China's property market has slowed since June 2021 as regulators stepped up their deleveraging campaign against the bloated sector, triggering defaults at some heavily indebted companies.

But the decline moderated as authorities and property developers in multiple cities introduced measures in December to boost home sales, with local governments providing subsidies for buyers and real estate firms offering discounts.

Separately, rents in Shenzhen dropped 5.5 percent year-on-year to around 72 yuan (HK$88.23) per square meter in 2021, the same level as in 2017, mainland media reported, citing data from a real estate agency.

Source: Reuters

https://www.thestandard.com.hk/section- ... oming-out'

[behappyalways]

China's property crisis reaches biggest builder Country Garden
https://www.theedgesingapore.com/news/c ... try-garden

[winston]

China Builds 27 Empty New York Cities

by James Dale Davidson

Astonishing inventory of 70 million empty apartments structures accumulating dust throughout China.

That is at least a $36.4 trillion question. Maybe a $45.9 trillion, or possibly even a $116.6 trillion question. The correct answer depends on China’s actual debt level.

In 2017, Shih put total Chinese debt at 328 percent of GDP (reported at $14 trillion), therefore $45.9 trillion.

According to Shih, “total interest payments from June 2016 to June 2017 exceeded the incremental increase in nominal GDP by roughly 8 trillion RMB.”

Professor Christopher Balding of HSBC Business School, Peking University concludes that total debt in China is a breathtaking 833 percent of GDP. That means a debt of roughly $116.6 trillion.

The actual debt level could be three and a half times higher than suggested by official figures.

Source: Epoch Times

https://www.theepochtimes.com/china-bui ... HhHDvAk%3D

[behappyalways]

大到不能倒? 中地產龍頭恒大興衰啟示錄 TVBS文茜的世界周報-亞洲版 20220205 X 富蘭克林‧國民的基金
https://m.youtube.com/watch?v=q9XT4eecwOg

[winston]

China eases curbs on home loans

Bank loans to fund low-cost rental projects will no longer be subject to regulatory curbs, the People's Bank of China said in a statement yesterday, the latest bid by authorities to tackle a slumping property market.

Under the lending limits that took effect in January last year, China's largest state-owned banks were told to trim their loan exposure to the property sector to 40 percent or less.

Banks' mortgage lending was capped at 32.5 percent of outstanding credit.

Those exceeding the limits were given a grace period of four years to meet the requirements.

The latest easing comes after banks were recently urged to lend more to developers and speed up mortgage approvals.

Authorities have also made it easier for companies to obtain financing to buy assets from weaker real estate firms by excluding such debt from regulatory limits on borrowing.

"It's a strong signal of credit easing," following the move to loosen M&A loans, said Yan Yuejin, research director at E-house China Research and Development Institute.

Source: The Standard

https://www.thestandard.com.hk/section- ... home-loans

[winston]

China mortgage rates dip as support grows

Mortgage loan rates in many parts of China have dropped, while China's biggest bad-debt managers are moving to support cash-strapped real estate developers at the urging of policymakers in Beijing, adding to official efforts to contain the fallout from a string of defaults.

Many banks including the Bank of China have lowered the mortgage rate for the first home to 4.9 percent from 5.1 percent at the end of last year, and the mortgage rate for the second home falls to 5.2 percent from 5.6 percent, reported Securities Times, a national financial newspaper in mainland China

Meanwhile, China's regulators have urged the state-owned firms including China Huarong Asset Management and China Cinda Asset Management, the country's biggest bad-debt managers, to participate in the restructuring of weak developers, acquire stalled property projects and buy soured loans, according to people familiar with the matter.

Source: Bloomberg

https://www.thestandard.com.hk/section- ... port-grows

[winston]

Provisions for China Real Estate

Hong Kong lenders HSBC, Hang Seng Bank, Standard Chartered and Bank of East Asia (BEA), set aside at least US$1.02 billion last year to cover for risks arising from China’s real estate sector.

Source: SCMP

[behappyalways]

Evergrande: the end of China's property boom | FT Film
https://m.youtube.com/watch?v=dnp_MxXY9qs

[winston]

Meltdown in China

Red-hot risk now expanding to Western auditors, shadow banks, and Beijing itself

by Anders Corr

The Financial Times revealed that the West’s Big Four accounting firms are abandoning many of their long-prized Chinese property developer clients due to the latter’s failure to file audited annual financial results by the deadline.

Bloomberg noted that Chinese “shadow banks” are buying controlling stakes in projects from the distressed developers, likely due to pressure from local officials.

Only provide them with enough liquidity to settle some of their $3.4 trillion in liabilities.

“Trust companies including MinMetals Trust Co. and Zhongrong Trust Co. have bought stakes in at least 10 real estate projects this year.”

The family company of Hong Kong billionaire Joseph Lau lost approximately $1 billion on China Evergrande shares and bonds in 2021.

Source: Epoch Times

https://www.theepochtimes.com/property- ... Yn1%2Bo%3D