Shimao Tumbles; Home Presales Under Threat: Evergrande Update
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Shimao Group Holdings Ltd. drove Chinese property stocks and bonds lower over growing concerns about its ability to pay its debt, renewing concerns about the health of the sector. Private equity firms meanwhile are cooling on the nation’s real estate, while Citigroup Inc. analysts warned of risks ahead even as China pledged to ensure “stability” in the economy next year.
China’s crackdown on housing, which triggered a default at China Evergrande Group and led to a plunge in sales, is calling into question the way freewheeling property developers have financed homes to the masses through the widespread use of presales.