China: Real estate bubble bursts: Three-way red line (three red lines)
ーChinese real estate bubble corneredー
Bank of China Insurance Industry Supervision and Administration Committee:
President Guo Shuqing described the real estate bubble as the greatest financial risk.
A “gray rhino” is a “risk of being left unattended even though it is known to exist.”
Authorities have issued strict lending regulation decree to reduce real estate prices.
However, it is difficult to gradually lower real estate prices.
March 2021 70 City Real Estate Index:
0.5% increase compared to February,
Rising for 66 consecutive months,
Compared to the same period of 2020, it increased by 4.6%.
Real estate prices continue to rise despite the restraint policy.
It is said that it is because of the state-owned enterprises.
Three-way red line (three red lines):
Ministry of Housing and Urban Rural Construction (Dwelling Department), People’s Bank of China (Central Bank),
In August of last year, “three red lines” were launched at a real estate roundtable discussion.
In other words
Asset-debt ratio over 70%,
Net debt capital ratio over 100%,
Short-term debt ratio falls below 100%,
Bank lending was restricted to the above real estate companies.
Real estate companies are color-coded into four levels: red, orange, yellow, and green.
12 Real Estate Companies:
Twelve private real estate companies that participated in this roundtable discussion.
12 Ordered real estate companies to reduce their total loan debt.
Country Garden,
Evergrande,
Vanke,
Fusion,
Middle beam,
Insurance,
Shinshiro,
Nakaumi,
Huayuan Castle,
Green space,
China Resources,
Youkoujo,
Twelve companies were required to show how to clear the Sando Red Line within three years by the end of September.
Real estate bubble burst near:
-The debt index is outstandingly bad (Chinese Evergrande Group)-
From September 7th, all real estate properties were sold at a discount of 30% for a month.
Reuters reported that the real estate bubble burst at one point, causing a turmoil within the industry.
Radio Free Asia (RFA):
The Middle Finger Research Institute (China Index Academy) has recently announced.
January-March Land (use right) area owned by real estate companies
Analyze land (use right) purchase price ranking results,
It pointed out the problem.
Top 10 Land Purchase Amounts
Of the top ten, there are only two private real estate companies, Fusion and Hamae.
Top 10 Land Areas Owned
There are only four private companies: Wanda, Fusion, Country Garden, and Shinshiro Holdings.
In other words, state-owned enterprises are strengthening their ability to purchase land.
Chinese SNS WeChat:
Introducing the post of “Taku Exhibition Old Dog” for real estate investors.
“Most of the land auctions in Chongqing and Guangzhou were auctioned off by state-owned enterprises,” he said.
The top is a state-owned holding company
Announced the ranking of land purchase amount and area of Chinese real estate companies from January to March this year.
1st place: Green space China acquires land for 32.8 billion yuan,
2nd place: Protective development acquires land for 26.9 billion yuan,
3rd place Xiamen developer acquires land for 23.9 billion yuan,
4th place: Faucet China Merchants Bank acquired land for 20 billion yuan.
Faucet China Merchants Bank is a developer company under the umbrella of China Merchants Bank, a centrally managed company.
Four major private companies in the real estate market:
Country Garden,
Wanda,
Evergrande,
Fusion,
The four major private companies also stepped on one of the three red lines in terms of the “Sando Red Line” policy.
Money Hyundai | Kodansha