Beijing is opening the door to a real estate bazooka. Bloomberg Opinion’s Shuli Ren doubts Chinese President Xi Jinping will bail out privately held developers.
A debt crisis in China 's vast property sector has been a major drag on the world's number two economy HONG KONG: A third year into an unprecedented housing downturn, China ’s President Xi Jinping seems to be finally getting worried, prompting speculation of quantitative easing and fuelling a bull run in Hong Kong-listed Chinese stocks.
That initiative pulled China’s property and stock markets out of a slump. Since Beijing has been floating the idea of urban village renovation lately, Xi is essentially opening the door to his second bazooka. That did not last long. The second-hand real estate market, where developers are not involved, is booming. Buyers hunt for bargains and sift through deeply discounted listings.
UBS Group AG estimates Vanke needs 28 billion yuan in monthly contracted sales just to break even on a free-cash-flow basis. The developer has not hit this level this year yet, even though it did in most months of 2023. Alternatively, the central government can establish a national acquisition platform to purchase unfinished projects from developers.
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