Bond issuances by China’s embattled property firms dropped steeply in the months from January through March, reports the South China Morning Post. Major developers only issued bonds of RMB 35.5 billion ($5.6 billion) in Q1 2022, a decline of 68% year-on-year, according to data from a unit of Beike, China’s biggest online property broker. Altogether with onshore issuances, Chinese property firms raised RMB 173.3 billion in this period, a year-on-year decline of 43%.
“The risk associated with this industry persists, and investors and creditors—offshore in particular—are still concerned about Chinese developers’ debts. Even if we see more supportive measures being rolling out, time is needed to restore confidence,” BRI said in a research note on Thursday.
China’s “three red lines,” measures in place since August 2020 to control systemic risk posed by weak property developers, have sent the industry into a slump not seen since the 2015 stock market crash. Major developers such as China Evergrande Group and Kaisa Group Holdings defaulted on their bonds last year as a result.