Chinese property prices hit the skids in frozen market

It’s farewell to  Chinese new home price gains with the seventy city index yesterday pulling a donut in September (-0.08) but still up 3.8% over the year:

The breadth of losses is expanding sharply as the freeze spreads. Only 14 of 70 cities recorded price gains:

Prices are slowing everywhere:

Existing property is falling faster at 0.2% for the month.

Expect more losses in October and beyond as developers dump stock into a frozen market. They have also dumped land purchases which will, in turn, prevent any infrastructure offset for construction:

China’s cash-strapped developers are becoming reluctant to bid for land during the nation’s property slump, threatening to undermine a $1 trillion revenue source for local governments and deepen the economic slowdown.

About 27% of land parcels offered by local governments went unsold in September as no developer submitted bids — the highest rate since at least 2018, according to data compiled by China Real Estate Information Corp., which tracks auctions across 128 Chinese cities. Proceeds from land auctions across the country plunged 18% in August from a year earlier, the biggest decline in almost three years, Bloomberg calculations based on Ministry of Finance data show.

Aaaaand, we got another default to keep funding spreads wide:

Sinic Holdings Group Co. became the latest Chinese real estate firm to default as investors wait to see whether China Evergrande Group Inc. will meet overdue interest payments on dollar bonds this week.

Sinic’s credit rating was lowered by S&P Global Ratings to Selective Default from CC after the company failed to repay the interest and principal of its $250 million note due Monday, according to a statement dated Tuesday.

Plus, Evergrande’s pulled its asset sale:

China Evergrande Group terminated discussions to sell its property-management arm, a deal that would have given the cash-strapped developer a major cash infusion as it faces impending debt payments.

Evergrande requested that its long-halted shares resume trading on Thursday and said that it ended talks last week to sell 50.1% of its stock in Evergrande Property Services Group Ltd. for about HK$20 billion ($2.6 billion). The developer disclosed the latest developments in a filing with the Hong Kong stock exchange Wednesday.

Onwards and downwards for Chinese property.

Houses and Holes
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