In today’s roundup of regional news headlines, the trading prices of China’s high-yield dollar bonds near a record low as a loan boycott threatens to spread from homebuyers to construction firms. In Hong Kong, meanwhile, some apartment buyers face a growing risk of default amid rising interest rates and weakening property values.
China Junk Debt on Brink of Record Low as Property Woes Grow
Chinese junk dollar bonds are hovering near a record low set in March, as the country’s property crisis deepens with pain spreading from developers to suppliers and banks.
Prices of China’s high-yield dollar notes, mostly issued by real estate firms, were steady Wednesday morning, according to credit traders. A Bloomberg index tracking the sector shows that prices fell 1.8 percent Tuesday to 57 cents on the dollar, a level just inches away from its lowest ever seen four months ago. Read more>>
China’s Mortgage Boycott Capital Plans Property Bailout Fund
A Chinese city facing the most boycotts by angry homeowners is setting up a bailout fund to help cash-strapped developers complete housing projects.
Henan Asset Management and government-backed developer Zhengzhou Real Estate Group will jointly set up a fund for the real estate sector, the provincial asset manager said in a statement dated Tuesday on its website, without providing further details. Read more>>
China Construction Firms Now Boycotting Loans
Some suppliers to Chinese real estate developers are refusing to repay bank loans because of unpaid bills owed to them, a sign that the loan boycott that started with homebuyers is starting to spread.
Hundreds of contractors to the property industry complained that they can no longer afford to pay their own bills because developers including China Evergrande Group still owe them money, Caixin reported, citing a statement it received from a supplier Tuesday. Read more>>
HK Homebuyers Face Growing Risk From Stage Payment Schemes
An increasing number of buyers who opt to buy incomplete flats in Hong Kong via stage payment schemes are at risk of defaulting on their purchases, as rising interest rates in the city accelerate real estate price drops.
More than 76 percent of buyers of incomplete flats opted for stage payment schemes as of 30 June, up from 52.3 percent for the whole of 2021 and 54.5 percent in 2020, according to data from mReferral Mortgage Brokerage Services. Stage payment schemes allow buyers to defer loan repayments until projects are complete. Read more>>
Residential Rents Near Hong Kong Schools Drop by Most in 2 Years
Hong Kong districts with shrinking student populations have registered the biggest declines in home rents since the coronavirus pandemic broke out in early 2020, according to property agency data, suggesting that a wave of emigration is profoundly impacting the property market.
Home rents fell the most in the eastern and southern districts of Hong Kong Island and the Wong Tai Sin area of Kowloon, according to data on average transacted rents compiled by Midland Realty. These are the same areas where the Education Bureau is considering relocating schools that have become underpopulated to new development areas. Read more>>
Chinese Lead Foreign Buyers of US Homes for 10th Year
The Chinese topped the list of overseas buyers of US homes for a 10th straight year, according to the US National Association of Realtors.
The NAR, which groups together buyers from the mainland, Hong Kong and Taiwan, said investors spent $6.1 billion on property purchases in the 12 months ended March, an increase of 27 percent from a year earlier. Six out of 10 Chinese investors settled their purchases in cash. Read more>>
Fullerton Health Reaches ‘Amicable’ Settlement With Shareholders
A feud between three co-founders and shareholders of Fullerton Healthcare has resulted in a definitive settlement agreement that will pave the way for the group to complete a merger proposed by Hong Kong-based RRJ Capital.
In a press statement on Tuesday, Fullerton Health said dissenting minority shareholders Michael Tan and Daniel Chan had withdrawn their petition filed in January to wind up the company, as per the settlement agreement. Read more>>
H&M Harajuku Mega-Store Closing Next Month
Retail has been hit hard over the last few years, with a number of stores closing in Tokyo. After the closure of Shibuya’s Bershka store just a few days ago, Harajuku’s H&M is now set to close for good. As reported by Shibuya Keizai Shimbun, the Swedish fast fashion brand will shutter the four-storey outpost on 2 August.
Opened in 2008, the Harajuku venue was the second H&M in Japan (after its Ginza store, which closed in 2018). The Harajuku shop occupies prime real estate, sitting along the fashionable Meiji-dori near big shopping centres including Laforet and Tokyu Plaza Omotesando Harajuku. Read more>>
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