Epoch Times Chinese version reported that from July 21 to 26, at least 4 of China’s top 100 real estate companies announced that they defaulted on U.S dollar bonds.
Out of the four real estate companies mentioned above, Powerlong Properties is the largest one. On July 26, Powerlong Real Estate issued a notice that it failed to repay the principal and interest on the bonds worth about $21 million before the July 25 maturity date.
In addition, this company has a bond with a principal amount of about $37 million that is due on November 8 of this year.
The remaining three real estate companies that declared default were Jingrui Holdings, China South City Holdings, and Junfa Group.
The announcement by Jingrui Holdings on July 22 showed that it was unable to repay the debt due on July 25, with a total principal and interest of $275.6 million.
China South City Holdings made an announcement on July 21, revealing that it is seeking to settle five U.S dollar bonds with a total debt of $1.57 billion.
Junfa Group, dubbed the “King of Yunnan,” disclosed on July 22 that it would default on its $13 million bond debt due on July 24.
The Junfa Group’s reason given for failing to repay the debt is that this company has faced the unfavorable factors of the macroeconomy, the real estate market downturn, and the recession financial environment, together with the impact of many Covid-19 pandemic waves.
While real estate companies regularly default on dollar bonds, the Chinese government’s revenue from land and property taxes is plummeting.
Citing official financial revenue and expenditure data released by the Chinese government, Epoch Times said that in the first half of 2022, revenue from land and property taxes fell 28% year on year.
According to data released by China’s Bureau of Statistics on July 15, in the first half of this year, the total land area purchased by Chinese real estate companies decreased by 48.3% compared to the same period last year.
Many Chinese real estate companies asked farmers to exchange agricultural products for houses. Local governments asked civil servants to sell houses in the countryside. A series of failed real estate projects to hand over houses. These are other facts that show China’s serious decline in the real estate sector.
According to Standard and Poor’s Global Ratings (S&P), China’s real estate sales will decrease by about 30% this year.