China’s Evergrande defaults may trigger a domino effect, since it has been the largest, and we may expect to see the rest will follow. It is not good news after all, and close to Christmas and near the end of the year.
It has been labeled a defaulter in the international market, we expect the real estate empire’s last chapter will begin soon. Debt crisis in the property sector just like all the past incidents happened across the world, the domino effect will come. It is surprising to see how a company ends with USD 300 billion of total liabilities and now is officially labeled as a defaulter. The last chapter of sage will be. Restructuring or taking over or nationalizing the coming of how it goes we can see. For sure all the property buyers will impact, in particular for those for sure will never complete the project.
Reckless expansion and keep borrowing for endless projects, market slowdown and trigger the crisis which indeed can not be overcome this round, turn default, and the rest is news we expect to see. This will trigger a domino effect on the rest of the property market who are in a very similar situation, and what next? It impacts China real estate property stability. Property and real estate have always been one of the strong and main pillars to make sure China’s economy produces strong growth year after year from the past. Next chain reaction will happen in the financial market, who have been given excessive credit and now become huge debt. Market stop or hold investment decisions in property and see what happens, or pressure to sell below the value to cash out is something likely to happen, which again creates a spiral of negative events one after another.
Despite what mega news is happening in China, similar cases will happen somewhere else across the globe. This is why COVID-19 pandemic has been labeled as a change accelerator, it brings good and bad. The next normal with 2022 just twenty days away.
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