Chinese Property Slump Extends Into September
Kanebridge News
Share Button

Chinese Property Slump Extends Into September

Debt-saddled developers in China cut spending and demand from home buyers slowed.

By Elaine Lu
Tue, Oct 19, 2021 11:47amGrey Clock 2 min

China’s giant housing market slowed substantially in September, official data showed, as the country’s debt-saddled developers cut spending and demand from home buyers waned.

Monday’s data builds on recent reports from individual real-estate companies showing punishing drops in sales. It also underscores how property-market weakness, already evident in lackluster August figures, hasn’t abated as the industry enters what is traditionally a much stronger period for home sales.

Investments made by property developers fell 3.5% in September compared with last year, according to data released by China’s National Bureau of Statistics on Monday. It was the first time property investment had fallen year-over-year after growing quickly since the beginning of the coronavirus pandemic.

Home sales by value fell 16.9% in September from a year earlier, while the floor area of new construction projects that were started in the month fell 13.5%. Both measures had already dropped sharply year-over-year in August, falling 19.7% and 17%, respectively.

The data paint a bleak picture for China’s property market and the many developers that had banked on strong housing sales to help pay off large amounts of borrowings. Global investors have turned bearish on the prospects of Chinese real-estate developers, sending their dollar bond prices to deeply distressed levels. The yield on an ICE BofA index of high-yield bonds from Chinese companies climbed above 23% last week, its highest in more than a decade.

“It’s become a lot harder for developers to access financing…at affordable rates, so that’s probably going to result in a further pullback in housing starts going forward,” said Julian Evans-Pritchard, senior China economist at Capital Economics. “I think policy makers are willing to take measures to support housing demand but they’re less willing to take measures to support developer-borrowing.”

A string of property developers—starting with industry giant China Evergrande Group—have missed payments on their dollar bonds over the past month, and defaults are rising.

Late last week, a smaller developer, China Properties Group Ltd., said it had defaulted on $226 million in three-year notes that matured on Oct. 15. A few days earlier, Sinic Holdings, another Hong Kong-listed Chinese developer, warned it was likely to default on bonds that mature on Oct. 18, after earlier falling behind on some other obligations.

Overall, data showed Monday that China’s economy grew 4.9% in the third quarter from a year earlier, slowing sharply from the previous quarter’s 7.9% growth rate, as power shortages and supply-chain problems added to the impact from Beijing’s efforts to rein in the real estate and technology sectors.

“Today’s set of data reconfirmed our view that the property slowdown is one of the main drivers of the current China economic slowdown, on the back of financial tightening and property tightening,” said Mo Ji, chief China economist at Fidelity International.

“Chinese policy makers are striking a delicate balance between growth goals and reform goals,” she said, describing the country’s housing costs as the government’s biggest challenge, next to those of education and healthcare, in its drive to reduce income inequality.

Reprinted by permission of The Wall Street Journal, Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: October 18, 2021



MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

Related Stories
Property
Owning a Home in an LGBTQ-Friendly Area Comes With a Hefty Price Premium
By LIZ LUCKING 30/05/2024
Property
A 600-Year-Old Medieval Villa Overlooking Florence Lists for €12 Million
By LIZ LUCKING 29/05/2024
Property
The suburbs where we’re building the most new homes
By Bronwyn Allen 28/05/2024
Owning a Home in an LGBTQ-Friendly Area Comes With a Hefty Price Premium
By LIZ LUCKING
Thu, May 30, 2024 2 min

The cost of owning a home in an LGBTQ-friendly area in the U.S. comes with a hefty price premium of almost 50%, according to a report Wednesday from Redfin.

In a metropolitan area with state laws protecting LGBTQ people from housing discrimination, a home buyer needs to earn an annual income of $150,364 to afford a median priced home. That’s 46.8% more than the $102,435 buyers need to earn to afford a home in places without such protections, the online property portal said.

For the purposes of their report, a metro is considered to have protections if the state it’s located in prohibits housing discrimination based on sexual orientation and/or gender identity, Redfin explained. In the case of metro areas which span multiple states, Redfin considered the metro to have protections if at least one of the states it’s located in prohibits such discrimination.

“LGBTQ+ Americans face disproportionately large barriers to homeownership,” said Redfin senior economist Elijah de la Campa in the report. “On top of paying a premium to live somewhere that feels safe, many LGBTQ+ house hunters are earning less than the typical U.S. worker, and face discrimination while shopping for homes despite laws that prohibit it.”

The locales where individuals identifying as LGBTQ make up the largest share of the adult population are also those where housing is the least affordable, the report found.

In San Francisco, where 6.7% of the adult population identifies as LGBTQ—the highest share of any of the 54 metropolitan areas Redfin analyzed—only 5.1% of listings last year were affordable based on the median local income, one of the lowest shares in the country.

In Portland, Oregon, which had the second highest share of LGBTQ adults at 6%, only 6.7% of homes for sale were affordable; in Austin, Texas, where 5.9% of the adult population identifies as LGBTQ, 2.9% of listings were affordable.

And in Seattle and Los Angeles, where LGBTQ adults make up 5.2% and 5.1% of the population, 4.8% and 1.9% of homes for sale were affordable, respectively.

All but one of those top LGBTQ metros—Austin—has state-level protections, the report said.

MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

Related Stories
Lifestyle
How an Ex-Teacher Turned a Tiny Pension Into a Giant-Killer
By MATT WIRZ 27/05/2024
Lifestyle
Should AI Have Access to Your Medical Records? What if It Can Save Many Lives?
By DEMETRIA GALLEGOS 28/05/2024
Money
The fast-approaching ‘silver tsunami’ set to hit the Australian economy
By Bronwyn Allen 23/05/2024
0
    Your Cart
    Your cart is emptyReturn to Shop