The cranes have stopped moving and major construction projects are frozen, with confidence in China’s housing market shattered.
The images are symbolic of China’s growing problem. The real estate boom that turned bad.Stream China Rising, hosted by Peter Stefanovic, on Flash, Australia’s biggest news streaming service. New to Flash?A construction project in Shanghai, China. Picture: Qilai Shen/Bloomberg via Getty Images
China’s woes are being compounded by the fate of China Evergrande Group – the most indebted real estate company in the world, with more than $418 billion on the books. Many smaller companies used the same business model – borrowing heavily and asking buyers to pay upfront for off-plan properties.At the height of the boom nearly 90 per cent of homes in China were pre-sold,Evergrande’s strategy of high debt, high leverage and high turnover, combined with low cost, led to massive growth.
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