According to Chinese media, as of September 5, the year 2021 has seen bankruptcy applications from a total of 274 real estate companies. That’s an average of one bankruptcy per day.
The Chinese government recently made it clear that “houses are for living, not for speculation.” Since the second half of last year, the regulatory authorities implemented strict standards to limit real estate companies’ ability to borrow. As a result, the housing market has lost its steam.
On August 31, Sun Hongbin, chairman of the board of directors of Sunac China, a major property developer headquartered in Tianjin, expressed concerns about the pressure on sales in the second half of this year. The concerns are partly due to the “resolute government policy.” As the impact of the sluggish economy on people’s purchasing power continues, he expected that the market would be “more miserable” in the coming months.
Data from the China Index Academy, an influential property research institute, the real estate sector is facing a peak in debt repayment, with a total of 83.85 billion yuan (US $13 billion) in bonds to mature in September. The next peak will occur in March and April of 2022, with a monthly bond payment of 103.94 billion yuan (US $16 billion) and 94.06 billion yuan (US $14.5 billion) respectively.
Source: Central News Agency, September 7, 2021