China Real Estate: Easing Policy Measures Insufficient for a Sharp Turnaround

Investment Insights

The uncertainty in China’s real estate market continues to loom on investors’ minds. With homebuyers boycotting the mortgage payments on the stalled projects and developers facing a default risk, the investor community wants some critical questions answered. Should we realistically expect a V-shaped recovery in the short-term? Will the various policy-easing measures taken by the government provide any solace? 
Read our latest report for the answers.

Key takeaways:

  • On the back of policy easing by the Chinese government as well as the ease of access to debt and the lockdown being lifted, the real estate sector may witness recovery in the mid-term. 
  • Exchanging the bonds or pushing maturity dates ahead would provide short-term relief but would not resolve the credit crisis. We may see more defaults by property developers due to increased pressure on bond maturities and the difficulty to free up cash to settle their outstanding debts amid the property sector crisis.
  • Boycotting mortgage payments on stalled projects remains a serious concern as it could lead to a surge in the default rate of banks that are exposed to such assets, thereby bringing instability to the financial sector.

To know more...

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