Chinese developers have suffered a meltdown of at least $90 billion in stocks and dollar bonds this year, with a bursting housing bubble and an intensifying debt crisis threatening to inflict even more pain, reports Bloomberg.
The builders have lost about $55 billion in share value since 2022 began, according to a Bloomberg Intelligence stock gauge. The sector’s dollar notes have fallen more than $35 billion, show calculations based on a Bloomberg bond index, the constituents of which can change over time. The wipeouts have pushed developer stocks down to levels not seen in a decade and junk dollar notes to record lows.
Pessimism has become more entrenched after Beijing signaled that homeowners, not builders, are the priority of efforts to stabilize China’s slumping housing market. In one recent sign of the tensions, more than a dozen developers in the central province of Anhui asked for help from their local government to restore property sales in the face of protests from disgruntled homebuyers. Longer term, an aging population and a policy shift that seeks to redefine real estate as a form of public goods means the sector’s boom era may have already passed.