"Since the beginning of last year, people are starting to realize real estate prices are not going up," Ren said. "Right now people are reassessing what in the future will be a good investment," Liqian Ren, leader of quantitative investment at WisdomTree, said in an interview last week. Tight capital controls also make it difficult for people in China to invest outside the country, while the local financial markets are less mature than those of developed countries. That's worse than the 34.4% decline for the prior week.įar more Chinese household wealth has been locked up in property than is the case in many other countries. 6 was down by 49% versus 2019, according to Nomura. The seven-day moving average of new home sales as of Aug. "The most likely way for Country Garden or Chinese developers in similar situation to avoid defaults will be asset sales," Wong added. He pointed out that since China started its deleveraging campaign in 2016, it is very unlikely the state would step in to bail out real estate developers. Redmond Wong, market strategist at Saxo Markets Hong Kong said Country Garden will find it "very difficult, if not impossible" to refinance - and other Chinese developers would face difficulties raising money as a result, especially offshore. Real estate and related industries have accounted for about a quarter of China's economy. The analysts pointed out that new starts in residential construction have fallen for 28 months straight. "With that faltering confidence, the private property sector will likely remain a drag on the country's growth for the rest of the year." "After watching developers default and fail to complete housing for other families, few Chinese families are willing to shell out in advance for new housing," Rhodium Group analysts said in a note this week. Most apartments in China are sold before they are completed. Last year, many people halted mortgage payments after a delay in receiving the homes they had bought. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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