The unwavering belief of Chinese home buyers that real estate was a can’t-lose investment propelled the country’s property sector to become the backbone of its economy.
But over the last two years, as firms crumbled under the weight of massive debts and sales of new homes plunged, Chinese consumers have demonstrated an equally unshakable belief: Real estate has become a losing investment.
The troubles of the country’s real estate sector were laid bare on Monday when a Hong Kong court ordered China Evergrande to wind up operations and liquidate the company, which is saddled with over $300 billion in debt.
Like the industry it once ruled, Evergrande limped along for two years after defaulting on payments it owed investors.
Evergrande, lacking the cash to pay creditors, tried to exude confidence that its apartments remained a sound investment.
Persons:
Evergrande
Locations:
Hong Kong, China