Bond investors bet on China real estate

Bond investors are shrugging off warnings and betting that Bejing’s attempts to cool property prices will not damage Chinese real estate company profits, Bloomberg reported. Despite a statement by esteemed Harvard University professor Kenneth Rogoff that the slowing of price appreciation in Chinese property markets indicates the beginning of a real estate "collapse," yields on China developer’s renminbi-denominated bonds fell to new lows against government debt this year. A credit strategist attributed the improved marketability of Chinese developer bonds to local investors’ confidence in the long-term outlook for housing. Housing prices in 70 Chinese cities rose 11.4% in June year-on-year, according to government statistics, while property sales value rose 25% and project investment rose 38%.