Chinese developer Country Garden says it can't meet debt payment deadlines after sales slump
Chinese developer Country Garden says it can't meet debt payment deadlines after sales slump
Chinese property developer Country Garden has warned it cannot meet deadlines to repay its loans as the company struggles to restructure its debts.
"What if we make a Ponzi scheme so big that the whole country would be thrown into turmoil if it collapsed?" and other questions nobody wanted the answer to
This is the best summary I could come up with:
HONG KONG (AP) — Chinese property developer Country Garden warned Tuesday that it cannot repay on time a 470 million Hong Kong dollar ($60 million) loan in the latest sign of distress after Beijing clamped down on mounting debts in the industry.
The company said in a filing to the Hong Kong Stock Exchange that it “expects that it will not be able to meet all of its offshore payment obligations when due or within the relevant grace periods,” including U.S. dollar notes the firm has issued.
Its liquidity crisis suggests developers remain under pressure even after regulators lifted some controls on housing purchases to alleviate troubles in the industry.
Since there has not been an industry-wide improvement in property sales, Country Garden said “its liquidity position is expected to remain very tight in the short- to medium-term.”
Last month, a former Chinese official estimated that even China’s 1.4 billion population would not be able to fill all the vacant homes across the country.
But housing construction is a major driver of the economy, fueling demand for materials, appliances and all sorts of products.
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Tofu dreg industry
Isn't it a good thing that there's surplus homes? The principle of single home ownership is outdated in a reality where vacation homes exist, transportation between cities is fast and inexpensive, and family may live a few hours away from you.
It's certainly much better than the housing crunch Canada is going through.
Unfortunately, many of these surplus homes were bought as an investment. Not just ONE investment among many, but literally the life savings of an entire family, across multiple generations. Now that property prices and demand are crashing, that means entire swathes of the population are on the verge of losing their entire savings and retirement fund. Not just one or two members of a family, but entire families together are facing the prospect of losing everything.
It's not much better or worse than the housing crunches elsewhere, it's just an entirely different situation and dynamic.
Often the quality of the buildings is below sub-par and, frankly, dangerous.
Also it's not entirely impossible that Canada has a housing surplus that is simply kept off the market for regular folk because that'll earn the ghouls in charge more money
It's going to be pretty bad for the people who will lose their savings over this.