Chinese Real Estate Debt Is Blowing Up (Fasten Your Seat Belt America, It May Get Bumpy)
Gregory White
May 31, 2010, 10:02 AM
Chinese real estate companies are losing their easy access to dollar denominated credit via debt markets as investors are beginning to lose confidence in the market’s long-term stability.
8 Chinese real estate developers have had their debt spreads against U.S. Treasuries widen by 2.26% on average this past week, according to Bloomberg.
Tightening measures enacted by the Chinese government are having an impact on investors’ belief in the long-term ability of real estate firms to pay back their loans.
Chinese real estate debt makes up a massive 45% of the Asian debt market outside Japan.
But now with restrictions on pre-sales, mortgages on multiple properties, and a potential tax on residential real estate, the outlook is grim for the country’s real estate sector, and for its place in Asian debt markets
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(Excerpt) Read more at businessinsider.com
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